Gold slips, heads for worst weekly drop since June 2013

Gold slips, heads for worst weekly drop since June 2013
x
Highlights

Gold fell for a ninth straight session on Friday on a stronger dollar ahead of key U.S. jobs data and the metal was headed for its worst weekly dip in over three years on increased expectations of a Federal Reserve rate rise by year end.

Gold fell for a ninth straight session on Friday on a stronger dollar ahead of key U.S. jobs data and the metal was headed for its worst weekly dip in over three years on increased expectations of a Federal Reserve rate rise by year end.

Spot gold slipped 0.2 percent to $1,252.38 an ounce by 0647 GMT. The yellow metal touched a four-month low of $1,249.68 in the prior session.

Bullion was on track for its second straight weekly loss, down nearly 5 percent, its biggest weekly decline since June 2013.

U.S. gold futures were up 0.1 percent at $1,254.50 an ounce.

The dollar index was up 0.3 percent.

The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, an indication of firmness in the labor market.

"People are now looking to the non-farm payroll tonight for hints on an increase in interest rates in November," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong.

"Whenever there is a dip, we see people buying on the physical side," he added.

Gold prices could pull back to as low as $1,200 an ounce after breaking out of their 2016 uptrend this week, according to analysts who study past price patterns to determine future direction.

"In our view any (nonfarm payroll) number above 190,000 will likely be bearish for gold as it should send the dollar up and almost certainly usher in a year-end rate hike, with possible room for more," INTL FCStone analyst Edward Meir said in a note.

Spot gold failed to break a strong support at $1,250 per ounce and it may hover above this level for one or a few days or bounce into a range of $1,260-$1,266, Reuters technical analyst Wang Tao said.

In Europe, the European Central Bank (ECB) intends to push on with its aggressive stimulus policy of negative interest rates and massive bond buying until it is happy with the outlook for euro zone inflation, senior officials said.

ECB Vice President Vitor Constancio said a Bloomberg report suggesting that there was already consensus among ECB rate setters to reduce the 80 billion euros ($89 billion) monthly bond purchases was mistaken.

The report aggravated a sell-off in gold on Tuesday as the yellow metal fell over three percent to its worst one-day fall since September 2013.

Silver fell 0.4 percent to $17.21 after falling over two percent in the prior session, to its lowest since June 22.

Platinum was down 0.4 percent at $959.40. Palladium fell 0.6 percent to $663.35.

Show Full Article
Print Article
Next Story
More Stories
ADVERTISEMENT
ADVERTISEMENTS