Gold price heads for 2nd weekly gain on growth concerns
New York (Feb 22) Gold held steady on Friday, on course for its second straight weekly gain, with weak economic data from the United States compounding worries about a global slowdown while investors await concrete signals on U.S.-China trade talks.
Spot gold was little changed at $1,322.06 per ounce as of 1038 GMT. The metal was headed for a second straight weekly rise, up almost 0.1 percent this week, having scaled a 10-month peak at $1,346.73 on Wednesday.
U.S. gold futures were up 0.1 percent at $1,329.1 per ounce.
"The market is expecting the dollar to weaken. We expect growth in the U.S. to slow," said Natixis analyst Bernard Dahdah.
The dollar index was little changed versus six major currencies, but was set for its biggest weekly fall in a month. The U.S. unit, which was increasingly sought as a refuge for investors against the backdrop of the U.S.-China trade spat, has been pressured recently on signs of a breakthrough in talks. Minutes of the U.S. Federal Reserve's latest meeting painted a slightly less dovish than expected picture on the future of interest rates, weighing on gold over the last two sessions. Higher interest rates reduce investor interest in none-yielding bullion.
However, data showing that new orders for key U.S.-made capital goods unexpectedly fell in December on declining demand for machinery and primary metals, revived some market expectations that the central bank would halt its rate hiking cycle this year. This added to jitters over a slowdown elsewhere, including Europe and China, which analysts said has bolstered appeal for gold, considered a safe store of value during economic and political uncertainty. "The main target (for gold) is still the technically important area between $1,350 and $1,360 above which would be a one year high," said Ronan Manly, a precious metals analyst at BullionStar Singapore.
Investor attention has turned to the culmination of trade talks between U.S. and Chinese negotiators, which has shown signs of promise of late. However, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, dropped 0.63 percent to 789.51 tonnes on Thursday. The slight pullback in ETF holdings should not be read as a shift in stance by gold investors since the levels are still close to the highs recorded at the beginning of this year, Natixis' Dahdah said.
Elsewhere, palladium gained 1 percent to $1,483.98 per ounce, having surpassed the psychologically significant $1,500 level for the first time on Feb. 20.
The autocatalyst metal was on track for a third straight week of gains, up about 3.6 percent.
Platinum rose 0.7 percent to $825.10, and was set for its best week since early January. Silver was up 0.2 percent to $15.85, poised to snap two consecutive weekly losses.
Reuters
