• Gold prices slipped on Friday from the previous day's one-month high as the dollar strengthened on a solid U.S. jobs report, while palladium was on track for its largest weekly gain since March on record high U.S. car sales.
U.S. non-farm payrolls data that showed a slowing in hiring last month but an increase in wages, supported the view that the U.S. Federal Reserve will press ahead with interest rate increases this year, analysts said.
• February gold GCG7, -0.71% fell $7.90, or 0.7%, to settle at $1,173.40 an ounce, after notching its highest settlement in five weeks on Thursday. Expectations about the pace of rate increases—a negative for gold that doesn’t offer a yield—has cooled somewhat. For the week, the yellow metal tallied a 1.8% gain, its biggest weekly rise in two months.
But with markets uncertain ahead of U.S. President-elect Donald Trump's inauguration on Jan. 20, investors turned cautious after gold reached its highest since Dec. 5 at $1,184.90 on Thursday.
• "Any profit that can be booked at this early stage is welcomed by most, so that's why we're seeing a scaling back a bit," said Saxo Bank analyst Ole Hansen.
• Chicago Fed President Charles Evans said the central bank could raise rates three times this year if economic data comes in a bit stronger than he expects, while Richmond Fed President Jeffrey Lacker said it may have to raise interest rates quicker than markets currently predict.
• "For 2017, we think we are starting from a clean base, leaving room for seasonal drivers to breathe some life back into the yellow metal," said Christopher Louney, commodity strategist for RBC Capital Markets, in a note.
"In fact, in our seasonality analysis we observe both the strongest and most consistent positive price performance during Q1 over the last 11 years."
Additional, RBC Capital Markets looks for gold to average $1,245 an ounce in 2017 and $1,303 in 2018, according to a report released Friday.
The bank sees a recovery after the tumble in prices that has occurred since the U.S. presidential election.
• Wall Street and Main Street alike look for gold’s resurgence to continue next week, according to a pair of Kitco News gold surveys.
• “Seasonal trends point up from early January to late in the month,” said Ira Epstein, director of the Ira Epstein division of Linn & Associates, who is among the majority seeing higher prices.
• Phil Flynn, senior market analyst with at Price Futures Group, also looks for gold to maintain its recent upward momentum. “The continued concerns about the Chinese currency falling and the capital controls in China should keep demand for physical gold strong next week.”
• Kevin Grady, president of Phoenix Futures and Options LLC, also said he is bullish. He suggested any correction lower in the U.S. dollar, after its previous run-up, is likely to bring in new bullish gold futures positions.
• Ken Morrison, editor of the newsletter Morrison on the Markets, figures $1,200 gold is a possibility.
• “The year for gold is starting off very similar to last year with new buyers dominating the trend, as evidenced by the 30,000-contract increase in open interest during the recent $40 rally,” he said. “The five-day moving average crossed above the 25-day moving average Thursday, a first since Nov. 1, indicating upside momentum has returned to gold. The market may need a little time to consolidate recent gains, but a $1,200 target next week is doable.”
“You’re probably seeing some fresh buying amid uncertainty at the start of the year with a new president (to be inaugurated this month),” Sean Lusk, director of commercial hedging with Walsh Trading, said. “Gold fell too far, too fast.”
Reference: Reuters, Market Watch, Kitco
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