Gold price set for fourth weekly gain on softening dollar
New York (Jan 11) Gold rose on Friday as continued dollar weakness kept the precious metal on track for a fourth straight weekly gain.
In addition to dollar-denting on expectations that the brakes could soon be applied to U.S. interest rates, gold was also supported by increasing market nervousness over U.S. President Donald Trump's unbending demand for a wall to be built on the border with Mexico. Spot gold rose 0.5 percent to $1,292.92 an ounce by 1043 GMT. U.S. gold futures were up 0.5 percent at $1,293.4.
"President Trump increased the rhetoric with relation to opening the government and building the wall (along the Mexican border)," said Naeem Aslam, chief market analyst at Think Markets UK.
"That and the dollar weakness because of the Fed's dovish stance are pushing gold prices higher."
The dollar slipped against other major currencies, impaired by Fed Chairman Jerome Powell's comment that the central bank could be patient on rate policy. The dollar index has fallen more than 2 percent since mid-December. "The $1,300 resistance level for gold is looking very vulnerable. Risk aversion has been supportive, but as we're seeing now, its primary driver is the dollar," said OANDA senior market analyst Craig Erlam.
"And the dollar softening as trade relations between the U.S. and China improves should continue to lift gold."
U.S. officials expect China's top trade negotiator to visit Washington this month after this week's talks with mid-level officials in Beijing. Gold, which is used as a safe-haven investment during times of economic and political uncertainty, is up about 0.6 percent for the week. Fuelling concerns about global economic growth are a bevy of economic factors including weak data from China, Switzerland and France. In other precious metals, palladium firmed by 0.2 percent to $1,324 an ounce and was up about 1.8 percent for the week. Silver , meanwhile, was up 0.8 percent at $15.68 and platinum rose 0.4 percent to $822.70.
Reuters
