Gold holds steady after steep fall
Spot gold remains flat in early trade while US gold futures gain
Bengaluru — Gold was little changed on Friday, having declined the most in two weeks in the previous session after strong US economic data, but the metal’s losses were limited by falls in the dollar and Asian equities.
Spot gold was flat at $1,291.93/oz as of 04.01 GMT, after touching a one-week low on Thursday. US gold futures gained about 0.1% to $1,294.60/oz.
“The market is holding tight ahead of the corporate earnings to know whether the economic conditions slowed in the first quarter and did it affect the corporate structure,” Phillip Futures analyst Benjamin Lu said.
“If earnings show stronger and better than expected results we might see gold stepping back a little further.”
Strong earnings will likely increase investor appetite for riskier assets, denting bullion’s appeal.
Asian shares turned lower ahead of the US corporate earnings season as investor caution over the global growth outlook overcame some reassuring US economic data.
The dollar fell 0.2% against key rivals, paring most of the gains made in the previous session, and was en route for its first weekly fall in four.
Gold fell more than 1% in the previous session after reports showed that the weekly jobless claims in the US fell to the lowest in nearly half a century and producer prices increased the most in five months in March.
“The robust US data triggered a tsunami of stop-loss order collapsing markets and blowing out virtually every weak bullish gold position,” said Stephen Innes, head of trading and market strategy at SPI Asset Management.
However, the metal was broadly flat for the week, having risen to a two-week peak earlier this week due to dovish central banks and worries on global growth.
The IMF on Tuesday slashed its global economic growth forecasts for the year. The US Federal Reserve and European Central Bank maintained their dovish policy stance citing slowdown in global growth.
Gold may end its bounce around a resistance at $1,297/oz and then retest a support at $1,291/oz, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver was flat at $14.96/oz and is down about 1% for the week.
Spot platinum gained about 0.5% to $892.08/oz, but is on track for its first weekly fall in five.
Palladium was up about 0.5% at $1,372.20/oz.