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Gold on track for first weekly loss in three on strong dollar

Reuters 

By K. Narayanan

(Reuters) - Gold held steady on Friday en route to its first weekly loss in three, pressured by gains in the dollar, but kept above the $1,300 level by concerns over economic growth in and elsewhere.

Spot gold was steady at $1,310.46 per ounce, as of 1029 GMT, after hitting its lowest since Jan. 29 at $1,302.11 on Thursday.

U.S. gold futures were up about 0.1 percent at $1,314.70.

"The major headwind is the pretty resilient dollar at the moment," said Philip Newman,

"There are quite a few concerns - economically, financially and politically - and yesterday, there was a downgrade in European growth (forecast)."

The dollar index, which tracks the greenback against major currencies, was on course for its first weekly gain in three and was trading close to a two-week high, taking some shine off gold.

While bullion has risen about 13 percent since touching over 1-1/2-year lows in August, mostly due to volatile stock markets and a dovish U.S. Federal Reserve, a strong dollar has driven gold down about 0.6 percent so far this week.

Gold denominated in euros climbed to its highest since early May 2017, at 1,157.37 euros per ounce, in the previous session after the cut its forecasts for euro zone economic growth this year and next.

The Commission cited global trade tensions and China's slowdown as the main drags on the European Union's economy.

Worries about a global slowdown and the lack of any sign of a resolution to the U.S.-trade row dragged global shares down for a third day.

U.S. said on Thursday he did not plan to meet with Chinese before a March 1 deadline set by the two countries to achieve a trade deal.

Meanwhile, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, have fallen over 1 percent for the week in what could be their worst fall since the week ended Oct. 7.

"We see no reason for the outflows in view of the falling stock markets and declining bond yields, however. We believe gold should be in good demand as an attractive alternative investment and a safe haven, partly because there are after all numerous political risks," said in a note.

Among other precious metals, palladium rose 0.5 percent to $1,392.20 an ounce.

Spot silver and platinum were up about 0.1 percent at $15.73 and $795.86 per ounce respectively.

(Reporting by K. Narayanan in Bengaluru; Editing by Kevin Liffey)

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

First Published: Fri, February 08 2019. 16:34 IST
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