•Gold prices marked time on Friday, after seeing its biggest one-day percentage loss in a month in the previous session, on a firmer dollar and increased investor appetite for riskier assets due to strong U.S. data and corporate results.
Spot gold was mostly unchanged at $1,286.44 per ounce as of 0536 GMT.
U.S. gold futures were steady at $1,287.20 an ounce.
Spot gold fell 0.8% on Thursday, its biggest one-day percentage decline in a month after risk sentiment improved.
•“Markets are very much inclined towards the riskier assets. Investors are trying to price in breakthrough in (Sino-U.S trade) talks due to the conciliatory tone from both the camps,” said Benjamin Lu, an analyst with Singapore-based Phillip Futures.
Strong corporate earnings have also boosted equities and the dollar, pressuring gold, he said.
•U.S. stock indexes extended gains on upbeat earnings as well as robust economic data that underlined the strength of the domestic economy. Meanwhile, the dollar index hit a two-week high against a basket of currencies.
The U.S. housing data showed homebuilding increased more than expected in April, while unemployment benefits fell more than expected last week, pointing to sustained labour market strength that should underpin the economy.
“We still see broad strength in the overall global economy, which is currently benefiting from more fiscal and monetary stimulus,” Fitch Solutions said in a note, adding that this limits a significant gold price appreciation in 2019.
The pullback in risk aversion lifted treasury yields. The rise in yields underpinned the U.S. dollar.
A stronger dollar makes gold more expensive for holders of non-U.S. currency.
•Early in the week, spot gold prices rose 1.1%, registering their best one-day percentage gain in nearly three months after China announced that it would impose retaliatory tariffs on a range of U.S. goods.
Even though trade worries have taken a backseat, investors are still wary of possible tensions emanating from a U.S. bid to block China’s Huawei Technologies from buying vital American technology.
•Meanwhile, Thursday’s fall in gold prices have worsened the technical picture for the metal.
Spot gold may break a support at $1,283 per ounce, and fall towards the next support at $1,264, according to Reuters technical analyst Wang Tao.
•Technical Analysis
Gold prices tumbled on Thursday as jobless claims rose more than expected. Prices dropped through the former breakout level and tumbled to the 10-day moving average near 1,287 which appears to be short term support. Longer term support is seen near an upward sloping trend line that comes in near 1,274. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in overbought territory. The current reading on the fast stochastic is 72, which is below the overbought trigger level and on the upper end of the neutral range. Medium term momentum is turning nuetural as the MACD (moving average convergence divergence) histogram is printing in the black with a flattening trajectory which points to consolidation.
•Technically, June gold futures prices closed nearer the session low today. A fledgling uptrend on the daily bar chart is still in place, but just barely now. Gold bulls and bears are back on a level overall near-term technical playing field but have faded and need to show fresh power soon. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,304.20. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the May low of $1,267.30. First resistance is seen at $1,290.00 and then at $1,295.00. First support is seen at today’s low of $1,284.20 and then at this week’s low of $1,282.40. Wyckoff's Market Rating: 5.0
•Among other metals, silver was down 0.2% at $14.52 and ounce, after hitting a low since Dec. 14, 2018 at $14.46 an ounce.
Platinum dipped 0.6% to $824.95 per ounce, having hit a two-month low at $823.50 earlier in the session.
Palladium was down 0.5% at $1,323.57 per ounce and has slumped more than 18% since the metal used in catalytic converters in car exhaust systems scaled a record peak of $1,620.53 in March.
Reference : Reuters, Kitco
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