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• Gold hit a two-week high on Friday, holding above the $1,500 ounce psychological level, as weak U.S. economic data fuelled expectations for another interest rate cut by the Federal Reserve later this month, while palladium scaled a fresh peak.

Spot gold touched its highest since Oct. 10 at $1,504.86, but was steady at $1,504.44 per ounce as of 0607 GMT. The metal has gained 1.1% this week, heading for its biggest weekly gain since the week ended Aug. 20. U.S. gold futures rose 0.2% to $1,507.20 per ounce.

• This is the second time in past two weeks that spot gold has crossed the $1,500 level. The metal breached the ceiling for the first time in more than six years on Aug. 7 and hit a record high of $1,557 on Sept.4.

New orders for key U.S.-made capital goods fell more than expected in September and shipments also declined, a sign that business investment remains soft amid the fallout from the U.S.-China trade war, data showed on Thursday.

The U.S. Federal Reserve has cut interest rates twice this year and investors see another cut on the cards as the economy struggles with the headwinds from the long-drawn trade war and slowing global growth.

• “Gold still has a number of geopolitical uncertainties and a high chance of a Fed rate cut at the end of this month to get support from, but considering the Sino-U.S. trade tensions are easing, any fresh positive development will weigh on prices,” said Argonaut Securities analyst Helen Lau.

“Today, we see some traders booking profit after prices broke the rangebound upper level of $1,500 as data showed a further slowdown in the U.S. economy.” Gold is often seen as a safer investment during times of political and financial uncertainty.

• In Europe, Prime Minister Boris Johnson called for a general election on Dec. 12 to break Britain’s Brexit impasse, conceding he will not meet his “do or die” deadline to leave the European Union next week.

• Asian shares wobbled on Friday as investors were reluctant to make big bets ahead of key central bank policy meetings next week against the backdrop of slowing global growth, while sterling extended its slide on a fresh bout of Brexit anxiety.

• China’s net gold imports via Hong Kong fell 9% in September from the previous month, mainly due to softer demand and expectations of possible measures by Beijing to prop up its yuan currency.

• Holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust, fell 0.13% on Wednesday from Tuesday.

• Gold technical analysis: Bulls testing bear's commitments at $1500 critical level

Spot Gold prices managed to get through the psychological $1500 level overnight with a solid bullish close. Downside attempts have been rejected, leaving an hourly bullish pin bar as the metal morphs into a bull flag. Bullish continuations will target the usual suspects higher up, namely the 1520 area that is guarding prospects for a test back to the key 1535 resistance target.

Firstly, trendline resistance here needs to give at this juncture. Failures will open a run back to the downside where bears can target a 50% mean reversion of the late July swing lows to recent highs level around 1460/70. Further beyond a 50% retracement will open prospects for the 61.8% at 1450 ahead of 1420 that guards 1385 as a full retracement.

• Determining gold's fair price is a very difficult task, according to the Australia and New Zealand Banking Group (ANZ), which has decided to take on the challenge in its latest report.
Based on gold's primary drivers — interest rates, inflation and the USD — Melbourne-based multinational bank determined that gold's fair value is around $1,400 an ounce, which is $100 below the current price levels.
"We looked at all the traditional factors and compared their relative valuation against gold to determine whether it is over- or under-valued. We found that gold is primarily driven by interest rates, inflation expectations and the USD," wrote ANZ senior commodity strategist Daniel Hynes and commodity strategist Soni Kumari. "Based on current prices, our model shows gold's current fair value is around USD1,400/oz."
But, gold bugs should not despair. A drop in gold to $1,400 could eventually boost the precious metals all the way up to $1,700 an ounce in just six months, concluded ANZ.
"Our model also suggests prices could breach USD1,700/oz over the next six months. This offers opportunities for consumers, producers and investors. A pullback to fair value, in the short term, could present an opportunity for increasing exposure to the metal," Hynes and Kumari said. "With solid fundamentals, gold remains a good prospect for portfolio diversification."

In terms of the future direction of the U.S. monetary policy, ANZ said that it expects one more rate cut this year, followed by a pause in 2020.
"This view is predicated on the U.S. coming through its mid-cycle slowdown and that the trade dispute with China will not escalate further and affecting growth," the strategists said.
The bank also sees inflation undershooting the Fed's 2% target for an extended period.

• Elsewhere, palladium hit an all-time high of $1,785.50 an ounce on supply concerns before trading flat at $1,776.68.

Palladium is crucial in the making of catalytic converters used in exhaust systems of vehicles, and concerns over its supply running out have helped lift prices by more than 41% this year alone, despite a weakening auto sector.

Silver rose 0.1% to $17.93 per ounce. Platinum was up 0.4% at $927.71, after scaling a more than three-week high in the previous session.

Reference: Reuters, CNBC, FX Street