Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER
Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER

Bengaluru — Gold prices edged up on Friday and were on track for their biggest weekly gain since mid-April as the dollar eased and Asian stocks weakened amid ongoing political turbulence in the US.

The metal slipped 1.1% on Thursday on profit-taking, its biggest one-day percentage drop since May 3 and snapping a five-day rally.

"The gold rally was overdone and there was a correction on Thursday. But perhaps, it came down a little too much from the highs of yesterday. So people started to pick up again," said Brian Lan, MD at gold dealer GoldSilver Central in Singapore.

"People are still wary of geopolitical risks and not selling the safe-haven asset yet."

Spot gold had risen 0.3% to $1,249.76/oz by 3.29am GMT. It was up about 1.8% for the week, set for its biggest weekly rise in five. US gold futures were down 0.3% at $1,249.60/oz.

The dollar traded above six-month lows against an index of six major currencies on Friday but was down 0.1% after gaining some reprieve overnight, helped by solid US economic data. New applications for US jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-and-a-half-year low, pointing to rapidly shrinking labour market slack.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.1%.

"Safe-haven buying has provided strong support to gold prices over the past six months," ANZ said in a note. "However, rising geopolitical risks in the US and elsewhere are likely to propel prices even higher, despite the spectre of a rate hike in the US next month."

Investors will watch with renewed focus next week’s testimony to the senate by former Federal Bureau of Investigation (FBI) director James Comey. Comey’s firing by US President Donald Trump last week set off a political firestorm and culminated on Wednesday in the Justice Department’s appointment of a special counsel to investigate possible ties between Russia and Trump’s 2016 presidential campaign.

Spot gold was expected to test resistance at $1,255/oz, as it had stabilised around support at $1,245, said Reuters technical analyst Wang Tao.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), fell 0.14% to 850.71 tonnes on Thursday.

Among other precious metals, palladium was down 0.2% at $760.53/oz. It has slipped 5.6% this week and is on track for its biggest weekly fall since late January. Platinum is down 0.2% at $930.50/oz. It was up 1.2% for the week and is on course to register its best weekly performance since the week ended April 14.

Silver was up 0.4% at $16.60/oz, gaining 0.9% for the week so far.

Reuters

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