August 1, 2016
Gold Holds Steady After Weak U.S. Economic Data
(Reuters) - Gold remained steady on Monday, after rising over one percent to a near 3-week high in the previous session, as disappointing U.S. growth figures last week bolstered safe-haven demand.
The U.S. Commerce Department reported on Friday that the U.S. economy grew at a 1.2 percent annual rate in the second quarter, much less than expected.
Spot gold was nearly unchanged at $1,349.76 an ounce at 0343 GMT. Bullion hit a high of $1,355.10 on Friday, its highest level since July 12.
U.S. gold was nearly flat at $1,356.9 an ounce.
"The (gold) markets will be more prudent ahead of the non-farm payrolls data due on Friday," said Jiang Shu, chief analyst at Shandong Gold Group.
"If it is going to be weak, then people will change their expectations about the U.S. economic prospects drastically. If they are relatively good, bad GDP data could be counterbalanced by a good jobs data."
Signals for spot gold were mixed and will become clearer when the metal gets out of a range of $1,346-1,357 per ounce, according to Reuters technical analyst Wang Tao.
Top U.S. Fed policymakers held varying opinions about rate hikes, with the Dallas Fed President Robert Kaplan calling for caution, while the San Francisco Fed President John Williams expecting the central bank to raise interest rates up to two times before year end.
"The Fed will likely abstain from doing anything in September or October as that will be too early to make a move. The latest odds show a rate increase for December at roughly 45 percent, while September at about 18," INTL FCStone analyst Edward Meir said in a note.
A sidelined Fed between now and year-end should weaken the dollar, pushing gold to test July highs of $1,374 levels, with an outside chance of getting to $1,400, Meir added.
Hedge funds and money managers increased their net long position in COMEX silver contracts, but cut net long position in gold, in the week to July 26.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.40 percent to 958.10 tonnes on Friday.
Among other precious metals, spot silver touched a 3-week high of $20.62 and was up 1.2 percent at $20.55.
Platinum, which hit over 14-month highs on Friday, was up 0.3 percent at $1,146.5 an ounce, while palladium was down 0.4 percent at $707. It hit over 9-1/2 month high on Friday.