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Gold hits one-year low, headed for fourth weekly loss

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Reuters BENGALURU
Last Updated : Aug 03 2018 | 1:15 PM IST

By Apeksha Nair

BENGALURU (Reuters) - Gold prices fell to their lowest in over a year on Friday amid a resilient U.S. dollar and were headed for a fourth straight weekly loss.

Spot gold was down 0.1 percent at $1,206.05 an ounce at 0644 GMT, after earlier dropping to the lowest since July 2017 at $1,204.91. For the week, the precious metal was down about 1.4 percent.

U.S. gold futures were 0.5 percent lower at $1,214.10 an ounce on Friday.

"Support for gold disappeared as a stronger U.S. dollar weighed on investor appetite. Gold prices fell below $1,210/oz and now appear destined to break below the key psychological barrier of $1,200/oz in the coming days," ANZ analysts said in a note.

The dollar climbed to a two-week high against a basket of major currencies and scaled a 14-month peak versus the Chinese yuan as worries about an escalation in trade tensions between the United States and China supported the U.S. currency.

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The greenback was also supported by strong U.S. economic data and outlook for higher interest rates. Higher U.S. rates tend to boost the greenback, in which the metal is priced.

"The most recent data suggests continued weakness for gold amid a stronger U.S. dollar index," said John Sharma, an economist at National Australia Bank.

Spot gold may break a support at $1,206 per ounce and fall more towards the next support at $1,194, as it has resumed its downtrend from $1,309.30, according to Reuters technicals analyst Wang Tao.

Meanwhile, Asian stocks were under pressure on Friday from the latest exchange of trade threats between Beijing and Washington.

China vowed on Thursday to retaliate if the United States acted on a threat to raise tariffs on the Asian nation's exports, fuelling fears in financial markets that the trade war between the world's two biggest economies would escalate.

Elsewhere, the Bank of England pushed interest rates above their financial crisis lows on Thursday, but signalled it was in no hurry to raise them further as Britain heads for Brexit next year with no clear plan for leaving the European Union.

Among other precious metals, silver fell about 0.2 percent to $15.27 an ounce and was on track for an eighth straight weekly decline, its longest weekly losing streak since at least late 2000.

Platinum was unchanged at $821.80 an ounce while palladium rose 0.2 percent at $912.97 an ounce. Both the metals were, however, headed for weekly losses.

(Reporting by Apeksha Nair in Bengaluru; Editing by Subhranshu Sahu and Vyas Mohan)

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First Published: Aug 03 2018 | 1:06 PM IST

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