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Gold slips as investors shrug off N.Korea; Fed rate hike outlook weighs


By Apeksha Nair

- Spot gold slipped on Friday, shrugging off North Korea's latest missile launch over Japan, with strong U.S. data raising the spectre of another interest

Spot gold was down 0.2 percent at $1,326.70 an ounce by 0733 GMT. It was down over 1 percent for the week, on track for its first weekly decline in four.

U.S. gold futures for December delivery gained 0.1 percent to $1,331.

"There are a couple of issues pushing and pulling at the market. The reaction to the missile launch this morning has been a bit negated by that better-than-expected (U.S) number," said ANZ analyst Daniel Hynes.

"We need to see a break above $1,340 to get any sort of sustainable upward trend."

North Korea fired a missile on Friday that flew over Japan's northern island of Hokkaido far out into the Pacific Ocean, South Korean and Japanese officials said, further ratcheting up tensions after Pyongyang's recent test of a powerful nuclear bomb.

Geopolitical risks can boost demand for safe-haven assets such as gold and the Japanese yen.

The yen slipped against the dollar on Friday, after earlier having risen on the news, with the greenback supported by strong U.S. consumer data.

"I think the market is increasingly focusing on the Federal Reserve and its probability of another this year," Hynes said.

The Fed has a 2 percent target, and a series of subdued readings have dampened expectations for further rate rises in the near term. Firming could support the case for another

The Fed's next monetary policy meeting is due to begin on Sept. 19.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold.

"Traders will be closely watching this evening's retail sales numbers. Another better-than-expected number could lead to strength and continue to cap gold into the week's end," said Jeffrey Halley, senior market analyst at OANDA.

Silver was unchanged at $17.75 an ounce and was set to mark its first weekly decline in four.

Platinum edged down 0.2 percent to $976.74 an ounce and was down over 2 percent for the week, on track for its biggest weekly drop since early May.

Palladium gained 0.2 percent to $923.95, after marking a four-week low on Thursday. It was heading for a second weekly decline.

(Reporting by Apeksha Nair in Bengaluru; Editing by Kenneth Maxwell and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, September 15 2017. 13:21 IST