Bengaluru — Gold extended its losses on Friday after stronger-than-expected US economic data dampened the expectation of the US Federal Reserve cutting interest rates sooner and softening geopolitical frictions shrunk safe-haven demand for the metal.
Spot gold eased 0.4% to $4,598.52/oz by 4.26am GMT. However, the metal is poised for a weekly gain of about 2% after scaling a record peak of $4,642.72 on Wednesday.
US gold futures for February delivery fell 0.5% to $4,601.80.
“The downward move [in gold] began predominantly when there was some ... [lowering of] the odds of some kind of intervention by the US in the social unrest in Iran ... [and] we’re seeing data come through from the US, it shows that there’s not an urgency to cut interest rates,” said Kyle Rodda, an analyst at Capital.com.
The dollar was poised for a third weekly gain after data from the US labour department showed weekly initial jobless claims dropped 9,000 to a seasonally adjusted 198,000, below the 215,000 expected by a Reuters poll of economists.
A firmer dollar makes greenback-priced metals more expensive for other currency holders. Low-interest-rate environments generally favour nonyielding bullion.
People inside Iran, reached by Reuters on Wednesday and Thursday, said protests appeared to have abated since Monday while US President Donald Trump also struck a softer tone regarding military intervention against the country.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings nudged 0.05% higher to 1,074.80 tonnes on Thursday, its highest in more than three-and-a-half years.
Silver has turned into the most crowded commodity trade in the market, according to a report by Vanda Research on Thursday, as individual investors have been snapping up silver at an extraordinary pace.
Spot silver shed 1.8% to $90.70/oz, though it was headed for a weekly gain of over 13% after hitting a record high of $93.57 in the previous session.
Spot platinum dropped 2.8% to $2,342.14/oz, while palladium lost 2.3% to $1,759.07/oz, after hitting a one-week low earlier.
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