• Gold dips on profit-taking, analysts predict a rebound

prices dipped as some investors locked in profits at the end of the week, and risk appetite strengthened, but expectations hovered that gold prices could move higher in the coming week.

Spot gold was down 0.3 per cent at USUS$1,287.70 an ounce, on track for a 0.5 per cent weekly decline. US gold futures for December delivery settled down US$4.90, or 0.4 per cent, at US$1,287.30 per ounce.

“There’s some liquidation of gold taking place, but light volume,” said Bill O’Neill, partner at Logic Advisors in Upper Saddle River, New Jersey.

“Next week will be important, because we are close to that US$1,300 level and the market has the potential to break through and establish a slightly higher range,” O’Neill added.

A key area of resistance remains at the US$1,300 level, traders said. US Federal Reserve’s minutes released Wednesday, regarded as ‘dovish’, supported gold and slightly lowered market expectations of a March rate hike, said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam.

A December rate hike has already been priced into the market, traders said.

The Fed’s cautious view of inflation could lead to a longer period of low interest rates, providing a solid platform for gold investment, said Cameron Alexander, analyst with Thomson Reuters-owned metals consultancy GFMS.

Higher interest rates tend to boost the US dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion.

The US dollar index on Thursday hit its lowest since September 26 against a basket of major currencies.

Dollar-priced gold typically rises when the US dollar index dips. Though gold prices were down Thursday, the weaker US dollar kept gold supported and within a range, said Bart Melek, head of commodity strategy at TD Securities in Toronto. — Reuters