Gold was steady and set for a second weekly gain on Friday, bolstered by the U.S. Federal Reserve’s caution on an interest rate rise and worries over Greece, but a recovering dollar capped the gains.
Spot gold was up 0.1 percent at $1,202.47 an ounce by 1331 GMT, after a 1.3 percent rise on Thursday, its biggest daily increase since mid-May. Prices are up 1.8 percent this week so far, the biggest weekly increase in over a month.
“The boost that gold got from a more dovish Fed this week slightly improves the technical picture, leaving $1,225 as the next biggest resistance level,” ActivTrades chief analyst Carlo Alberto de Casa said.
Gold hit a three-week high on Thursday on a softer dollar after Fed policymakers said a rate increase would be appropriate only after further improvement in the labour market and greater confidence that inflation would rise.
“The rate move, a stronger dollar and the re-pricing of the U.S. yield curve will limit any upside,” Danske Bank senior analyst Jens Pedersen said.
Non-interest-paying gold has benefited from a record-low rate environment following the 2007-2009 credit crisis. Higher rates would increase the opportunity cost of holding the metal.
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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