Gold prices steadied under the key $1,700 U.S. an-ounce threshold on Friday, ready for a loss on the week, with investors taking a breath after a dramatic selloff for precious metals in the prior session.
February gold added 70 cents to $1,697.50 U.S. on the Comex division of the New York Mercantile Exchange. It traded on either side of Thursday’s close and held tight to small trading range of between $1,694 and $1,701.90 U.S.
For the week, prices traded about 0.5% lower, with the biggest decline seen on Thursday, when gold dropped $21.10, or 1.2%.
Investors sold gold in the wake of the Federal Reserve’s announcement that it was expanding monetary stimulus and linking future interest rate moves to the level of unemployment. Investors were also taking profits as gold has had a lengthy positive run.
Experts said the Fed has now given clear signals of nearly unlimited support for the economy, therefore propping up stocks and giving investors few reasons to hold safe-haven investments such as gold.
Economic data on Friday showed a slightly bigger-than-expected drop for U.S. consumer prices, while industrial production rose 1.1% in November, the fastest pace in two years.
Preliminary data from HSBC’s China manufacturing Purchasing Managers’ Index for December showed a rise to a 14-month high of 50.9, triggering a rally in Shanghai stocks.
Following the data, the ICE dollar index , which measures the greenback against a basket of six major rivals, edged lower to 79.695, from 79.925 in late North American trading on Thursday. Weakness in the greenback tends to support dollar-denominated commodity prices.
March silver contract rose 12 cents, or 0.4%, to $32.48 U.S. an ounce. On Thursday, the contract fell 4.2%, to end at $32.36 U.S. an ounce, its lowest settlement in more than a month. Silver is historically more volatile than gold.
On a technical level, if gold falls below $1,690 U.S., the next obvious support level is around $1,660 U.S. Silver, meanwhile, looks like it’ll break support at $32.50 U.S., according to other observers.
Among other metals contracts, March futures for palladium rose $12.80, or 1.9%, to $704.45 U.S. an ounce, and those for copper rose two cents, or 0.5%, to $3.68 U.S. a pound.
January platinum futures rose $5.50, or 0.3%, to $1,618.30 U.S. an ounce.
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