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Gold slips as dollar rebounds; set for second weekly decline
Gold fell as much as 1.6% on Friday as the dollar bounced back, denting bullion’s appeal and setting it on track for a second straight weekly decline.
Gold fell as much as 1.6% on Friday as the dollar bounced back, denting bullion’s appeal and setting it on track for a second straight weekly decline.
Spot gold fell 0.3% to $1,937.81 per ounce by 1322 GMT, while U.S. gold futures dropped 0.4% to $1,937.80 per ounce.
For the week, gold is down 0.3%, having slumped more than 3% earlier this week.
“The dollar has made a lot ground over the past few days and it really has taken the edge off gold,” said OANDA analyst Craig Erlam, adding that while on the upside $2,000 is now a big barrier and $1,860 could be a bit of test prior to that.
Against a basket of currencies, the dollar gained 0.6%, making gold more expensive for holders of other currencies.
“For the time being we have seen the high in gold... until something happens either on the U.S. stimulus front in terms of the relief package or the U.S.-China tensions take a very positive or negative turn,” said David Madden, market analyst at CMC Markets UK.
Bullion’s fall came despite data signalling the euro zone’s economic recovery from its deepest downturn on record stalled this month.
Data also showed that activity, notably in the service sector, slowed in Germany this month.
Adding to doubts over a swift economic rebound, U.S. Federal Reserve officials on Wednesday warned the recovery faced a highly uncertain path.
“We are above $1,900 so I wouldn’t be too fearful. I think this is going to be the end of the dollar rally and it’s just going to be a correction in the wider upper trend which is still intact,” Madden added.
Elsewhere, silver fell 2.3% to $26.60 per ounce, but was poised for a weekly rise of nearly 1%.
Platinum 1.7%, to $902.62 per ounce, while palladium fell 0.4% to $2,173.50 per ounce.
