Gold set for biggest weekly fall since May
london — Gold prices steadied on Friday but were on track for their biggest weekly fall since May ahead of US employment data later that could influence the pace of US interest rate rises.
Gold this week broke below a recent trading range and tumbled through technical levels to its lowest since July as progress on US tax reform fuelled optimism about the US economy and boosted the dollar.
“You can put it down to the strength of the dollar and the ebullience of investors regarding equities and all things risk-on,” said ETF Securities analyst Martin Arnold.
“When in such a positive mindset investors don’t look for defensive assets like gold.”
Spot gold was down 0.1 per cent at $1,245.66 an ounce at 1109GMT, close to Thursday’s low of $1243.71, the weakest since July 26. It had fallen 2.7 per cent this week, its third consecutive weekly fall and the biggest since early May.
US gold futures were 0.4 per cent lower at $1,247.80. Selling was triggered after gold broke below $1,260, the bottom of its trading range since September, and plunged below its 200-day moving average for the first time since July.
Technical support is now at $1,250 and a fibonacci level at $1,240.90 but momentum indicators suggest that gold could fall to $1,204.90, the July low, said analysts at ScotiaMocatta.
However, ETF Securities’ Arnold said prices were supported by risks including US policy paralysis, tensions in North Korea and the Middle East, and a potential correction in equity valuations. He said gold’s fair value was $1,260$1,280. — Reuters