Gold claws higher on weak greenback, but more downside seen

NEW YORK/LONDON — Gold prices rose from six-month lows on Friday as the dollar slipped, but the modest nature of the recovery suggested speculators might still be poised to punish the metal further.

Spot gold gained 0.20% at $ 1,268.76 per ounce by 1: 34 p. m. EDT ( 1734 GMT), headed for a 0.80% weekly drop. In the prior session, bullion touched $ 1,260.84, its lowest since Dec. 19, 2017.

US gold futures for August delivery settled up 20 cents, 0.02%, at $1,270.70 per ounce.

“Gold is up with the dollar being a little weak today,” said Michael Matousek, head trader at US Global Investors.

A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.

Subdued gold reaction shows there’s more downside risk, said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam.

“People think since gold failed at the $ 1,300 level, they are seeing how far they can push it down and then move it up again. I would say it should bottom out anywhere between $ 1,250 and $1,200,” Mr. Boele said.

Gold tumbled last Friday after repeatedly failing to surmount the $ 1,300 level as speculators rushed to liquidate long positions and others added bearish positions.

The dollar dropped from an 11-month peak against a currency basket as the euro strengthened after a survey showed Euro zone private business growth recovered in June.

“If gold is not even in demand as a result of the escalating trade dispute between the US and China, we do not believe that the other upcoming events will do much to sway the opinion of market participants,” Commerzbank said in a note.

Asian gold demand picked up in most centers last week, with bullion selling at a premium in India for the first time in seven weeks.

Platinum increased one percent at $870.24 per ounce, while palladium gained 0.30% at $953.50 per ounce. Earlier in the session, platinum touched $ 851.74, the weakest since February 2016, while palladium slipped to a sevenweek low of $947.15 an ounce.

Silver was up 0.80% at $16.44 an ounce after falling to its lowest since May 2 at $16.16 in the previous session. —