Gold bullion rebounds from six-month lows on bargain hunting, weaker dollar

NEW YORK/LONDON — Gold prices rose on Friday from sixmonth lows as a weaker US dollar prompted bargain hunting, but bullion was on track for weekly and monthly declines and analysts said many speculators maintained short positions, leaving prices vulnerable to further losses.

Spot gold added 0.40% at $1,252.81 an ounce by 1:34 p.m. EDT (1734 GMT). On Thursday, it touched $ 1,245.32, its lowest since Dec. 13, 2017.

US gold futures for August delivery settled up $3.50, or 0.30%, at $1,254.50 per ounce.

“Gold is finding support from the weak US dollar and firm euro… and is at least recouping the losses it incurred yesterday,” Commerzbank said in a note.

Despite Friday’s gains, gold was down 1.2% so far this week, headed for a third straight weekly decline. For the month, spot gold was down about 3.4%, on track for its biggest monthly drop since November 2016.

“At the end of the month and end of the quarter, people try to buy gold to boost it,” added Michael Matousek, head trader at US Global Investors.

Both spot gold and platinum prices were headed for their weakest quarters since yearend 2016.

“The shorts are still in control and the momentum is negative. The dollar and US Treasuries have taken over the role of safe haven this month and as long as the trade war is creating uncertainty then that will probably prevail,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Hansen said the downtrend would likely accelerate unless gold held above multiple support layers slightly below $1,240. The euro increased after European Union leaders reached an agreement on migration. A stronger euro potentially boosts gold demand by making dollar- priced bullion cheaper for European investors.

The dollar index slipped against a basket of currencies.

Meanwhile, spot silver gained 1.1% at $ 16.13 an ounce. It was heading for a 1.9% weekly drop and 1.4% monthly decline.

Palladium rose 0.70% at $ 951.45 an ounce. It was down 3.4% for the month, its weakest month since March.

Platinum added 0.20% at $ 849.24 per ounce. During the session it hit its lowest since January 2016 at $837.30. It was down 8% for the quarter and 5.8% for the month.

“Speculative financial investors are currently betting on falling platinum prices to a greater extent than ever before, and platinum ETFs have been seeing continual outflows for months,” Commerzbank said in a note. —