October 14, 2016
Gold Prices Edge Lower as Equities, Dollar Gain
(Reuters) - Gold prices edged lower on Friday as stocks firmed and the U.S. dollar rose on expectations the Federal Reserve would raise interest rates by the end of the year.
Spot gold was down 0.1 percent at $1,256.50 an ounce by 0257 GMT. The metal was on track to end the week mostly flat.
U.S. gold futures were steady at $1,257.90 an ounce.
"People are happy to buy at these levels. But, there are a lot of expectations of a Fed rate hike in December, which will be bearish for gold," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong.
There will also be some uncertainty going into the elections, said Leung adding that if Democratic presidential candidate Hillary Clinton wins over Republican Donald Trump then the dollar could strengthen and pull gold down.
"Gold looks a bit weaker on charts. We need to see if prices can hold at $1,240 levels ... then we would be heading towards $1,260 and later to $1,275," he said.
Spot gold may consolidate further in a narrow range of $1,250-$1,266 per ounce for one day before falling to the Oct. 7 low of $1,241.20, according to Reuters technical analyst Wang Tao.
Markets will next look to Friday's U.S. retail sales data and remarks from Fed Chair Janet Yellen, who will address a Boston Fed economics conference at which Boston Fed governor Eric Rosengren will also speak.
"We think its (Federal Reserve's) rate hiking trajectory will remain very much intact," INTL FCStone analyst Edward Meir said in a note.
"As a result, the dollar will likely push higher going into year-end, offering gold its most formidable headwind and even countering the impact of weaker equities."
The dollar index, which measures the greenback against a basket of six major currencies, gained 0.1 percent to 97.612.
Asian stocks edged higher and the dollar bounced on Friday as global markets took a breather after being churned by downbeat Chinese economic data the previous day.
Global equity markets had slumped to a three-month low on Thursday.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.28 percent to 961.57 tonnes on Thursday.
Among other precious metals, silver edged 0.3 percent lower at $17.39 an ounce. The metal was on track for its third consecutive weekly loss.
Platinum was down for the fifth straight session as it fell 0.3 percent at $933.75 an ounce. The white metal is down over 3 percent this week.
Palladium shed 0.3 percent to $636.10 after having touched a new three-month low of $633.22 an ounce. The metal is down over 4 percent this week.