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Gold firms after 9-day losing streak; eyes weekly drop
[SINGAPORE] Gold firmed above US$1,150 an ounce on Friday as the dollar nursed losses after an extended rally, but the metal was still headed for its sixth weekly dip in seven on concerns that US interest rates would increase soon.
Spot gold edged up 0.5 per cent to US$1,159.30 an ounce by 0728 GMT, after posting nine straight sessions of losses, its longest losing stretch since August 1973, when it fell ten days in a row.
The metal is so far down about 0.6 per cent for the week, after hitting its lowest in more than three months at US$1,147.10 on Wednesday.
Despite the short-covering rally on the back of a softer dollar, traders were cautious about bullion's outlook.
"Gold looks to be finding some support around US$1,150 although the short-to-medium term bias is still to the downside," MKS Group trader James Gardiner said.
Bullion could see some more gains but will face resistance at US$1,166, said Phillip Futures analyst Howie Lee.
Gold has taken a beating since a stronger-than-expected US jobs report last week that stoked speculation the Federal Reserve would hike interest rates soon. Higher rates usually dent demand for assets that don't pay interest such as bullion.
Adding to the concerns was strength in the dollar, which climbed to its highest in nearly 12 years this week before profit-taking prompted a pause. The dollar index is still on track to end the week up more than one per cent, extending last week's 2.5 per cent rally.
A stronger greenback takes the lustre off bullion's safe-haven appeal, and makes it more expensive for holders of other currencies.
In a reflection of bearish sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.28 per cent on Thursday to 750.95 tonnes, the lowest since late January. It has been three weeks since the fund has seen any inflows.
Other precious metals have also taken hits. Silver is on track for a second straight weekly fall, while palladium is on course for its worst week since mid-January.
Platinum prices, which fell to their lowest since 2009 this week, were poised for a seventh weekly fall in eight.