Gold firms as weaker dollar, equities sell-off spur safe-haven demand

BENGALURU — Gold prices edged up on Friday and were on course for a third straight week of gains, supported by robust technical momentum and a softer dollar.

Spot gold was up 0.1% to $1,225.75 an ounce by 3:14 p.m. EDT (1914 GMT). US gold futures settled down $1.4, or 0.11%, at $1,228.7.

The yellow metal was headed for a 0.7% rise last week.

“The technical posture of gold in near-term basis has improved remarkably in the past two weeks,” said Kitco Metals senior analyst Jim Wyckoff, adding that the volatility seen in the stocks markets worldwide recently has also been favoring the bullion.

A recent sell-off in global stocks had prompted investors to seek refuge in gold, pushing prices of the bullion to a two-anda-half-month high, at $1,233.26 earlier last week.

However, equity markets recovered on Friday, capping gains in the bullion.

SEEKING SAFE HAVEN

Also supporting gold was a slightly weaker dollar, said David Meger, director of metals trading at High Ridge Futures.

“We have seen a bit of a pickup in safe haven buying over the last couple of weeks based on the concerns we see in economy and equity markets weakening,” Mr. Meger said.

Gold, which is priced in dollars, is seen as a safe store of value during political and economic uncertainty.

The dollar index against a basket of currencies was down 0.2%, retreating from a oneweek peak scaled earlier in the session.

On the technical front, a rise above the 100-day moving average, around $1,225, was also supporting gold, with some analysts saying a clear break above that level could trigger further gains and put further pressure on shortsellers. Further resistance for gold stood at about $1,236.90 an ounce and then at $1,240.00, Mr. Wyckoff said in a note.

Indicative of an improvement in investor sentiment, holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained 2.5% in the past two weeks.

In other precious metals, silver gained 0.3% to $14.60.

Platinum rose 0.7% to $831.60 an ounce, but was on track to post a weekly decline of 0.6%.

Palladium was up 0.9% at $1,080.25. The metal was set to post a weekly gain of 1.6% after falling for previous two weeks. —