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

London — Gold prices dipped on Friday as some investors locked in profits at the end of the week, but there are expectations that the market could advance towards $1,300 next week.

"I think gold will move back towards $1,300 next week or the week after, maybe on the back of dollar weakness," Georgette Boele, commodity strategist at ABN AMRO in Amsterdam, said.

"There are still some longs in the market, so there’s more technical momentum as they try to push prices up again to see what happens in the last weeks of the year."

Spot gold was down 0.3% at $1,287.21 an ounce by 11.15am GMT. Bullion was down about 0.4% for the week. US gold futures for December delivery dipped 0.4% to $1,287.40.

Boele said gold was supported by the release of the US Federal Reserve’s minutes on Wednesday, regarded as "dovish" and which lowered market expectations slightly of a March rate hike. A December rate hike has already been priced in.

"Investor appetite [for gold] is low even after slightly more dovish-than-expected Fed minutes. There just has not been enough to entice investors back into the market in great amounts," ANZ analyst Daniel Hynes said.

The Fed’s cautious view of inflation could lead to a longer period of low interest rates which provides a solid platform for gold investment, said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS. Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

Spot gold has abandoned a bearish target at $1,283 an ounce as it seems to have found a support at $1,288 and is biased to break above a resistance at $1,296, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver shed 0.1% to $17.04 an ounce and platinum gained 0.2% to $934.80 an ounce. Palladium dipped 0.3% to $1,008.60 an ounce after hitting a two-week high of $1,013.70 in the previous session.

Silver slipped 1.2% for the week and is poised for its first weekly decline in three. Platinum lost 1.5%, on track for its first weekly fall in four. Palladium climbed 1.7% this week.

Reuters

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