Gold on track for weekly gain amid weaker dollar

Bengaluru — Gold edged lower on Friday but prices were still set for their first weekly gain since mid-April, as the dollar receding from two-decade highs and mounting concerns over US economic growth revived safe-haven demand.

Spot gold was down 0.2% at $1,838.81/oz at 2.58am GMT, tracking a slight uptick in the dollar on the day. US gold futures edged 0.1% lower to $1,839.30. Gold prices have climbed about 1.5% this week.

“Recession fears are now giving way to US growth fears, and the latter is helping gold,” said Stephen Innes, managing partner at SPI Asset Management, but he said the US Federal Reserve’s aggressive rate hike path and quantitative tightening would still be major downdrafts for gold.

As bullion yields no interest it can become less attractive to investors when short-term US interest rates are hiked. It is, however, seen as a safe store of value during times of economic crises.

The US central bank will lift interest rates higher by the end of this year than expected just a month ago, keeping alive already significant risks of a recession, a Reuters poll of economists found.

“It’s been an exciting week, after the clear-out below $1,800 driven by higher real yields, it opened the door for long-term strategic buyers to step in front of a technical downtrend,” Innes said.

Reflecting an uptick in demand, SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.66% to 1,056.18 tonnes on Thursday, after a recent streak of losses.

Spot silver fell 0.3% to $21.83/oz, but it has gained about 3.6% this week. Platinum dropped 0.7% to $955.50 and palladium fell 0.1% to $1,997.65. Both were set for weekly gains of about 1.7% and 2.8%, respectively.

Reuters