The gold price reversed earlier gains in Friday morning trading despite a weaker dollar and higher oil prices providing commodities with a boost.
Spot gold was last at $1,190.60/1,191.40 per ounce, down $2.40 on Thursday’s close. It looked on course to retest $1,200 earlier, peaking at $1,196.00 before heading back to intraday lows albeit in a narrow intraday range of $6.
Silver followed in gold’s footsteps – at $15.84/15.89 per ounce, it was unchanged from the previous session, having earlier peaked at $15.94.
Gold is currently failing to benefit from a weaker dollar, which is tracking back after weak data released in the previous session. It was last at 1.0825 against the euro, down around a tenth of a cent – it had been as soft as 1.0899 earlier.
US weekly unemployment claims increased to 295,000 in April, higher than the forecast 288,000. US new home sales for March, meanwhile, came in at an annual rate of 481,000, which was 11.4 percent below the prior month’s reading and missed the 514,000 forecast.
Still, the lack of volatility in the gold market follows a quiet Asian session, with participants appearing sidelined ahead of news from Greece and Tuesday’s FOMC meeting.
“Price action within the precious complex during Asia on Friday was generally non-existent. Gold tracked lower within a $3 range with little noticeable interest coming out of China as the yellow metal looks to build a support around $1,185 over the short term, with $1,200 capping the market,” Alex Thorndike of broker MKS said.
Meanwhile eurozone ministers are attending a summit again today to discuss Greece’s possible default on its debt obligations but positive headlines have been supportive of the single currency, which may be reducing gold’s safe-haven appeal.
Still, the metal is also failing to benefit from the cross-commodities boost from four-month highs in oil prices. Brent crude hit its highest since December 11 at $65.66 per barrel on reports of further Saudi-led airstrikes on Houthi rebels in Yemen.
In data today, the German IFO business climate at 108.6 was largely in line with expectations, while US durable goods orders data are still to come before the Federal Open Market Committee’s two-day meeting next week, which will be scrutinised for clues on when the US may choose to begin normalising monetary policy.
The PGMs were also rangebound – platinum was last unchanged at $1,130/1,135 per ounce, while palladium was up $4 at $769/774.
“Platinum and palladium lack internal drivers right now and are more inclined to look to gold for direction,” UBS’ Edel Tully said in a note. “Platinum, in particular, is currently very highly correlated with gold. The three-month rolling correlation between platinum and gold is hovering near the highs of the range seen over the last seven years.”
(Editing by Mark Shaw)
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