Gold price rises above $1,170, but set for weekly drop
London (Oct 23) Gold prices rebounded from their lowest in more than a week on Friday as the dollar eased, but renewed expectations for a U.S. rate rise threatened to snap a streak of two straight weekly gains.
Spot gold rose 0.5 percent to $1,171.11 an ounce by 1022 GMT. It fell as low as $1,162.50 in the previous session, its weakest level since Oct. 13.
Prices drew support from a softer dollar, which fell back after rising to its highest in nearly a month on Thursday. The currency had rallied on upbeat data and a slide in the euro, after dovish comments by the European Central Bank.
Focus remained on the dollar on Friday, as markets anticipated U.S. manufacturing PMI numbers for October. The data is expected to show a slight dip from the previous month.
"That's the first manufacturing PMI for any major economy that we're going to see for October," said Tom Kendall, precious metals strategist at ICBC Standard Bank. "So it certainly has the potential to affect the dollar and the gold market if the number misses expectations."
Gold was heading for a 0.5 percent weekly loss.
The market was weighed by fresh doubts over when the United States will begin tightening monetary policy, as upbeat data on Thursday boosted fading expectations that the Federal Reserve might still raise interest rates this year.
U.S. home resales rebounded strongly in September and new jobless claims hovered around 42-year lows last week.
Gold fell to 5-1/2-year lows earlier in 2015 on expectations the U.S. central bank will raise rates this year, potentially lifting the opportunity cost of holding non-yielding bullion.
Concerns over the global economy have since pushed back expectations, but strong U.S. data recently increased the likelihood of a December rate rise.
"After the last meeting of the Fed, expectations of a rate hike this year began to diminish," Kendall said. "But it is very data-dependent. Positive surprises shift expectations more towards December."
Technicals provided only slight support, as gold briefly climbed above the 200-day moving average of around $1,174. The metal recently broke through the resistance level for the first time since May, holding near it for six sessions before slipping away on Thursday.
Silver was up 1 percent at $15.96 an ounce, platinum rose 0.3 percent to $1,008.80 an ounce and palladium gained 1.7 percent to $694.75 per ounce.
Source: Reuters
