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Gold heads for weekly gain on softer dollar despite Trump comments

Gold heads for weekly gain on softer dollar despite Trump commentsGold prices edged up on Friday, after falling from 1-1/2-year highs in the previous session, as the dollar remained weak despite US President Donald Trump backing a stronger currency.

Spot gold rose 0.3 percent to $1,351.40 per ounce at 0333 GMT. The metal has gained 1.5 percent so far this week.

Spot gold hit 1,366.07 on Thursday, highest since Aug. 3, 2016, reversing gains after Trump told CNBC in Davos, Switzerland, that he wants to see a strong dollar.

US gold futures were down 0.9 percent at $1,351.10 per ounce. Trump’s comment contradicted comments made by Treasury Secretary Steven Mnuchin a day earlier.

The dollar weakness is continuing to support gold prices, helping to hold them steady despite Trump’s comments, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

“There is some very good support for gold on the downside around $1,340 and a resistance around $1,360,” he said.

The dollar index

, a measure of the greenback against a basket of currencies, hit its weakest since December 2014 at 88.438 on Thursday. It was last down 0.3 percent at 89.154.

“While catching short-term speculators off guard, the gold price retracement will not threaten long-term positions whose view are cemented around a probable equity market correction and an extension of the US dollar downtrend,” Stephen Innes, APAC trading head at OANDA said.

Gold could break above $1,500 an ounce this year for the first time since its 2013 crash, GFMS analysts at Thomson Reuters said on Thursday, with the risk of a drop in surging equities and political instability boosting its appeal as a safe investment haven.

Asian stocks edged back from record highs on Friday.

The break above $1,330 has given fuel to gold’s rally and the first target of this movement could be seen at $1,375, ActivTrades chief analyst Carlo Alberto de Casa said.

“If the gold price jumps above this level, the rally could continue with targets at $1,390 and potentially at $1,415 … We will have a negative signal only if prices fall below $1,295-$1,300,” Alberto de Casa said.


edged up 0.2 percent to $1,012.70. Prices hit their highest since February 2017 on Thursday at $1,027.60.

Palladium fell 0.1 percent to $1,094.50. Palladium was on track for its second straight weekly loss, dropping nearly 1 percent so far this week.

Copyright Reuters, 2018

Source: Brecorder.com

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