Spot gold inched 0.1 percent higher to $1,324.59 per ounce at 0408 GMT. The metal was headed for a second straight weekly rise, up almost 0.3 percent. The precious metal had hit a 10-month high on Thursday, but later erased the gains.
U.S. gold futures were subdued at $1,327.7 per ounce.
· "On a day-to-day basis, gold is a function of changing currency markets and the U.S. dollar. Medium outlook is a lot more to do with geopolitical issues and yields," said Kyle Rodda, a market analyst with IG Markets.
The dollar index against a basket of six major currencies was set to decline about 0.3 percent this week, which could be its biggest weekly fall in a month.
"The fact that gold was overbought-driven very much by a new yield environment and tensions around the world has helped keep gold prices elevated," Rodda said.
· Gold had hit a 10-month high of $1,346.73 on Wednesday, but minutes from the Fed's January policy meeting indicated there might in fact be a rate hike this year, erasing gains in gold.
· "Dovish signals from U.S. Federal Open Market Committee officials for the shorter term have kept global equities steady whilst applying bearish pressures on the non-interest bearing asset," Phillip Futures said in a note.
· Markets were looking for further indications of progress on trade talks with U.S. and Chinese negotiators resuming high-level talks on Thursday to hash out a deal that could end their trade war, just over a week before a U.S.-imposed deadline.
The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources familiar with the negotiations, Reuters reported exclusively.
· Indicative of investor sentiment toward bullion, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.63 percent to 789.51 tonnes on Thursday.
· Gold Technical Analysis: Bouncing off 200-hour MA
Gold is currently trading at $1,325, having tested the 200-hour moving average (Ma) support of $1,320 in the overnight trade.
As seen above, the 14-hour relative strength index has pierced the descending trendline. So, the metal may revisit $1,330, although further gains look unlikely, as early signs of bearish reversal have emerged on a longer duration chart.
Gold fell 1.1 percent yesterday - the biggest single-day drop since Nov. 9 - confirming a bearish divergence of the 14-day RSI. The short-term bearish reversal, however, would fail if the metal closes today above the ascending 5-day MA, currently at $1,330.
· Meanwhile, palladium was up 0.3 percent to $1,473.00 per ounce, having surpassed the key $1,500 level for the first time on Feb. 20.
The autocatalyst metal was on track for a third straight week of gains, up nearly 3 percent.
Platinum gained 0.6 percent to $824, and was set for its best week since early January. Silver was little changed at $15.81 per ounce. It was on course to snap two consecutive weekly losses.
Reference: Kitco,CNBC
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