September 11, 2015
Gold Firms Near $1,110 But Poised For Third Weekly Drop
(Reuters) -Gold clung to small overnight gains near $1,110 an ounce on Friday, but the metal was headed for a third consecutive weekly fall as investors continued to fret over the timing of a looming U.S. interest rate hike.
Spot gold was little changed at $1,111.55 an ounce by 0317 GMT, after gaining 0.5 percent in the previous session.
Earlier in the week, gold had fallen to $1,101.11, the lowest since Aug. 11. It has lost 1 percent for the week.
U.S. gold, also headed for a third weekly dip, was trading at $1,110.90.
"It is hard to get too enthusiastic about gold currently," said HSBC analyst James Steel. "We are likely to see sideways trading until the FOMC," he said referring to the U.S. Federal Open Market Committee meeting.
Physical demand, which has provided little support for prices, could pickup if gold drops below $1,100, he said.
Traders are awaiting the Federal Reserve's next policy statement on Sept. 17 for clues on the timing of a U.S. interest rate rise, before taking any big positions in gold.
Concerns over slowing growth in China, mixed economic data and volatility in financial markets have increased uncertainty about the timing of any U.S. interest rate increase, which had been expected as early as this month.
Data on Thursday showed the U.S. labour market appeared to gain momentum in early September as fewer Americans filed for unemployment benefits, but weak inflation pressures may complicate the Fed's decision.
Bullion has benefited in recent years from ultra-low rates, which cut the opportunity cost of holding bullion while holding the dollar in check. But expectations that rates will rise soon have pushed the metal down 6 percent this year.
BNP Paribas SA revised its gold price forecast for 2015 on Thursday, citing strength in the U.S. dollar and concerns over the Chinese economy. The bank cut its price forecast by $15 to $1,145 per ounce for the year.
Among other precious metals, silver was headed for a weekly gain, while platinum was set for a third weekly dip. Palladium has been the best performer in the group this week, snapping three weeks of losses to rise 3 percent.