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Gold slipped to two-week lows and was set for its biggest weekly fall in nearly four months on Friday, pressured by a reviving dollar and as equity markets bounced back.
Spot gold is down about 1.6 per cent so far this week, which could be its biggest weekly decline since the week ending November 9. It was down 0.4 per cent at $1,307.01 an ounce at 1320 GMT, having touched its lowest since February 14 at $1,305.43.
US gold futures shed 0.6 per cent to $1,308.40.
“The news on jobs and Gross Domestic Product (GDP) was more favourable for the dollar, which has been gaining value. Because of that we are continuing to see some long liquidations,” said Afshin Nabavi, Senior Vice President at MKS SA.
“We have breached $1,315 and $1,310, which are very important support levels. Won’t be surprised even if we see a test of $1,300 later today.”
The dollar, which gained impetus from better than expected fourth quarter US GDP data, hit a 10-week high against the yen.
“Rallies in the dollar are taking their toll on gold much more than they were a few weeks ago which is a clear sign that sentiment towards the yellow metal has shifted,” OANDA senior market analyst Craig Erlam wrote in a note.
“The next test below is $1,300, a break of which could be the catalyst for another bearish move, at which point $1,275-1,280 becomes notable support.”
Gold rose to a 10-month peak last week, helped by expectations that the US central bank will pause interest rate increases and hopes of a US-China trade deal, but has declined about 3 per cent since.
“After it (gold) failed last week to rise above $1,350, the gold price is nearing the psychologically important $1,300 per troy ounce mark again today,” a Commerzbank analyst said.
Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, on Thursday fell 0.52 per cent to 784.22 tonnes, their lowest level since late December.
Elsewhere, palladium was steady at $1,542.96 an ounce.
Silver fell 0.6 per cent to $15.51, having earlier hit $15.46, a low last seen on February 14. Platinum fell 0.8 per cent to $863.43.
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