A steadier tone to the dollar after hefty losses earlier this week pulled gold back from the previous session’s peak of $1,343.64.
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Spot gold dropped 0.2% to $1,334.41 an ounce by 4.11am GMT, but was on track for a weekly gain of almost 2%, the highest since end-July.
USA gold futures slipped 0.4 per cent to $1,339 an ounce. “We expect gold to be mostly range-bound for the next few weeks”, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“But in the end everyone realises that (a December hike) will likely happen, so it is too unsafe to push gold prices above the previous peak for now”, she added.
RBC Capital Markets said in a note: “Despite gold’s jump yesterday, we think it will remain well short of year-to-date highs, and while it will certainly experience continued volatility in line with a number of other macro assets, we remain cautious through year-end”, RBC said. The dollar stabilised against a basket of currencies.
“The ongoing strength in the global equity markets and some signs of stabilization in the dollar could both start chipping away at gold’s underlying strength”, INTL FCStone analyst Edward Meir said in a note. The Fed signalled an increasingly careful approach to future rate hikes after a policy meeting on Wednesday, reassuring investors who had feared the US central bank could move more quickly to tighten monetary policy. “Also, the long-run expectation is that the Fed will eventually raise rates, which may stem gold gains”, said HSBC analyst James Steel.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.69 percent to 950.92 tonnes on Thursday. Among the precious metals, silver had the best week so far.
Silver was 0.2 percent lower at $19.78, but was the biggest riser this week among the main precious metals, climbing more than 5 percent, the most since the week ending July 1.
U.S. gold futures slipped 0.5% to $1,338.20 an ounce.
Thursday’s rally resulted in a break above the 61.8% retracement level of the September decline, increasing the potential for a further move higher to test the September high near $1,360. It rose as much as 1.7 per cent in the previous session.
In European markets, Germany’s DAX and France’s CAC-40 were down 0.4 percent and 0.6 percent respectively while the dollar softened by 0.1 percent to 1.1279 against the euro.
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