Gold futures extended losses on Friday, pressured by technical selling and speculation about who will become the next chairman of the Federal Reserve.
Gold for December delivery was last down $12.30, or 0.9%, to $1,318.30 U.S. an ounce in Globex trade, after closing out Thursday’s Comex trade with a loss of 2.4%, or more than $33 U.S. an ounce.
December silver — which had tumbled 4.4% on Thursday — furthered its decline by 30 cents, for a 1.4% drop, to $21.85 U.S. an ounce.
Analysts said stronger-than-expected U.S. jobless-claims data out early Thursday had increased the odds the Federal Reserve would begin trimming its monetary stimulus at next week’s meeting, an action that would be considered bearish for gold.
They also cited reduced expectations for a U.S. strike on Syria as dampening safe-haven demand, as well as technical factors.
Gold investors also considered a report by Japanese newspaper Nikkei that said former U.S. Treasury Secretary Larry Summers will be nominated as Federal Reserve chairman. The White House on Friday, however, denied the Nikkei report, saying President Obama has not made a decision yet about the next Fed chairman.
In addition, Goldman Sachs analysts reportedly warned of downside risks to gold overnight, saying prices could even drop below $1,000 U.S. an ounce in 2014. Previously, they’d had $1,175 U.S. as their 12-month target.
Yet in the face of gold’s recent weakness, some market analysts saw upside ahead. HSBC, for instance, hiked its 2013 average gold-price forecast on Thursday, according to research reported by Kitco.
HSBC said it saw this year’s average price at $1,446 U.S. an ounce, up $50 from its previous forecast, though it left its 2014 projection at $1,435 U.S.
The bank cited physical buying of the metal for the forecast hike, with investment demand fading as fears of imminent inflation diminish.
In other metals-futures trading Friday, December copper held steady at $3.21 U.S. a pound, while October platinum added $1.90, or 0.1%, to $1,444.60 U.S. an ounce. December palladium gained $7.10, or 1%, to $699.90 U.S. an ounce.
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