Gold slips as upbeat US data boosts dollar, dims rate-cut bets
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Gold extended its losses on Friday after stronger-than-expected U.S. economic data dampened expectations of the U.S. Federal Reserve cutting interest rates sooner and softening geopolitical frictions shrunk safe-haven demand for the metal.
Spot gold eased 0.4% to $4,598.52 per ounce by 0426 GMT. However, the metal is poised for a weekly gain of about 2% after scaling a record peak of $4,642.72 on Wednesday.
U.S. gold futures for February delivery fell 0.5% to $4,601.80.
“The downward move (in gold) began predominantly when there was some … (lowering of) the odds of some kind of intervention by the United States in the social unrest in Iran … (and) we’re seeing data come through from the U.S., it shows that there’s not an urgency to cut interest rates,” said Kyle Rodda, an analyst at Capital.com.
The dollar was poised for a third weekly gain after data from the U.S. Labor Department showed weekly initial jobless claims dropped 9,000 to a seasonally adjusted 198,000, below the 215,000 expected by a Reuters poll of economists.
A firmer dollar makes greenback-priced metals more expensive for other currency holders. Low-interest-rate environments generally favour non-yielding bullion.
People inside Iran, reached by Reuters on Wednesday and Thursday, said protests appeared to have abated since Monday while U.S. President Donald Trump also struck a softer tone regarding military intervention against the country.
SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings nudged 0.05% higher to 1,074.80 tons on Thursday, its highest in over 3-1/2 years.
Silver has turned into the most crowded commodity trade in the market, according to a report by Vanda Research on Thursday, as individual investors have been snapping up silver at an extraordinary pace.
Spot silver shed 1.8% to $90.70 per ounce, although it was headed for a weekly gain of over 13% after hitting an all-time high of $93.57 in the previous session.
Spot platinum dropped 2.8% to $2,342.14 per ounce, while palladium lost 2.3% to $1,759.07 per ounce, after hitting a one-week low earlier.
