Gold inches higher, but is on track for worst month since November 2016
Bengaluru — Gold rose early Friday after slipping to a more than six-month low in the previous session, as the dollar retreated from recent highs amid a rising euro, but the metal was on track for its worst month since November 2016.
Spot gold was 0.2% higher at $1,250.90/oz, as of 5.02am GMT. On Thursday, it touched $1,245.32, its lowest since December 13 2017.
"We’ve seen a pop-up in euro which put a bit of pressure on dollar, so gold is being bought. I don’t think it is going to be long-lived. Europe will come in and sell and dollar is probably still firm," a Hong Kong-based trader said.
Gold was on track for its third consecutive weekly decline, having slipped 1.4% so far this week. Spot gold was down about 3.6% for the month, heading towards its worst monthly loss since November 2016.
US gold futures were up 0.1% at $1,252.50/oz.
The euro jumped more than a half cent on Friday after EU leaders reached an agreement on migration, a thorny issue that has threatened EU unity and the fate of German Chancellor Angela Merkel. A stronger euro potentially boosts demand for gold by making dollar-priced bullion cheaper for European investors.
The dollar index against a basket of six major currencies was down 0.6% at 94.803, after having risen to about one-year high on Thursday. But, the index was still up 5.4% this quarter, supported mainly by rising US interest rates and an improving US economy.
"The dollar is strong, so we expect gold prices to head down," said Brian Lan, MD at dealer GoldSilver Central in Singapore.
"Gold is weak now and people are not looking to invest at this point in time."
The US economy slowed more than previously estimated in the first quarter amid the weakest consumer spending in nearly five years, but growth appears to have since regained momentum due to a robust labour market and tax cuts. However, St Louis Fed president James Bullard on Thursday said tight US labour markets could bring unemployment rates for blacks and Hispanics more in line with that of whites, another reason for the Federal Reserve to stop raising interest rates.
In other precious metals, spot silver gained about 1% at $16.10/oz. It was heading for its biggest weekly decline since the week-ending April 27.
Palladium rose 0.1% to $946/oz.
Platinum was nearly unchanged at $847.90/oz.
It hit its lowest since January 2016 at $837.30 earlier in the session. It was down so far 9% this quarter, its worst since the quarter-ending December 2016.