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PRECIOUS-Gold slips, heads for worst weekly drop since June 2013
October 7, 2016 / 4:31 AM / a year ago

PRECIOUS-Gold slips, heads for worst weekly drop since June 2013

* Strong support seen for spot gold at $1,250 - technicals
    * Spot gold on track for nearly 5 pct drop this week
    * Silver off 3-1/2 month lows hit Thursday

 (Updates prices)
    By Swati Verma
    Oct 7 (Reuters) - Gold fell for a ninth straight session on
Friday on a stronger dollar ahead of key U.S. jobs data and the
metal was headed for its worst weekly dip in over three years on
increased expectations of a Federal Reserve rate rise by year
    Spot gold slipped 0.2 percent to $1,252.38 an ounce
by 0647 GMT. The yellow metal touched a four-month low of
$1,249.68 in the prior session. 
    Bullion was on track for its second straight weekly loss,
down nearly 5 percent, its biggest weekly decline since June
    U.S. gold futures were up 0.1 percent at $1,254.50
an ounce.
    The dollar index was up 0.3 percent. 
    The number of Americans filing for unemployment benefits
unexpectedly fell last week to near a 43-year low, an indication
of firmness in the labor market. 
    "People are now looking to the non-farm payroll tonight for
hints on an increase in interest rates in November," said Ronald
Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong.
    "Whenever there is a dip, we see people buying on the
physical side," he added.
    Gold prices could pull back to as low as $1,200 an ounce
after breaking out of their 2016 uptrend this week, according to
analysts who study past price patterns to determine future
    "In our view any (nonfarm payroll) number above 190,000 will
likely be bearish for gold as it should send the dollar up and
almost certainly usher in a year-end rate hike, with possible
room for more," INTL FCStone analyst Edward Meir said in a note.
    Spot gold failed to break a strong support at $1,250 per
ounce and it may hover above this level for one or a few days or
bounce into a range of $1,260-$1,266, Reuters technical analyst
Wang Tao said. 
    In Europe, the European Central Bank (ECB) intends to push
on with its aggressive stimulus policy of negative interest
rates and massive bond buying until it is happy with the outlook
for euro zone inflation, senior officials said. 
    ECB Vice President Vitor Constancio said a Bloomberg report
suggesting that there was already consensus among ECB rate
setters to reduce the 80 billion euros ($89 billion) monthly
bond purchases was mistaken. 
    The report aggravated a sell-off in gold on Tuesday as the
yellow metal fell over three percent to its worst one-day fall
since September 2013. 
    Silver fell 0.4 percent to $17.21 after falling over
two percent in the prior session, to its lowest since June 22.
    Platinum was down 0.4 percent at $959.40. Palladium
fell 0.6 percent to $663.35.

 (Reporting by Swati Verma and Nallur Sethuraman in Bengaluru;
Editing by Richard Pullin and Amrutha Gayathri)

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