Gold set for worst week since November as dollar rises

Bengaluru — Gold slipped to two-week lows and was set for its biggest weekly fall in nearly four months on Friday, pressured by a reviving dollar and rising stocks.

Spot gold is down about 1.4% so far this week, which could be its biggest weekly decline since the week ending November 9. It was down 0.3% at $1,309.13 an ounce at 11.03am GMT, having touched its lowest since February 14 at $1,305.53. US gold futures shed 0.4% to $1,310.40.

“The news on jobs and GDP was more favourable for the dollar, which has been gaining value. Because of that we continue to see some long liquidations,” Afshin Nabavi, senior vice-president at MKS, said. “We have breached $1,315 and $1,310, which are very important support levels. Won’t be surprised if we even see a test of $1,300 later today.”

The dollar, which gained impetus from better-than-expected, fourth-quarter US GDP data, hit a 10-week high against the yen.

“Rallies in the dollar are taking their toll on gold much more than they were a few weeks ago, which is a clear sign that sentiment towards the metal has shifted,” Oanda senior market analyst Craig Erlam wrote in a note. “The next test is below $1,300, which could be the catalyst for another bearish move, at which point $1,275 to $1,280 becomes notable support.”

Gold rose to a 10-month peak of $1,346.73 last week, helped by expectations that the US central bank will pause interest rate increases, but has lost ground since as the dollar regained momentum.

“After [gold] failed last week to rise above $1,350, the gold price is nearing the psychologically important $1,300 per troy ounce mark again today,” Commerzbank analysts said. “Better sentiment on the stock markets and a reluctance by the physical gold investors are weighing on its price.”

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), fell 0.52% to 784.22 tonnes on Thursday, falling to their lowest level since late December.

Among other precious metals, spot palladium fell 0.6% to $1,534.31 an ounce, retreating from its all-time peak of $1,565.09 scaled earlier in the week. The metal is on course for a fourth consecutive week of gains.

Spot silver fell 0.3% to $15.55 an ounce, having earlier hit $15.46, a level last seen on February 14. Platinum fell 0.4% to $866.37. The metal is on track for a third straight weekly gain. 

Reuters