June 17, 2016
Gold rises on weaker dollar, set for 3rd straight weekly gain
(Reuters) - Gold rose on Friday after registering its biggest one-day fall since May 24 in the previous session, supported by a softer dollar and headed for a third straight weekly gain.
On a topsy-turvy Thursday, the safe-haven asset breached the $1,300 level and hit a peak of $1,315.55 an ounce - nearly a two-year high - before turning 1 percent lower following the suspension of campaigning for next week's "Brexit" referendum in Britain after a member of Parliament was shot dead.
Spot gold was up 0.4 percent at $1,283.90 an ounce at 0355 GMT. Bullion has risen 0.8 percent for this week so far.
U.S. gold fell 0.9 percent to $1,287.10. "Brexit concerns will still be the primary driver over the next few days," said INTL FCStone analyst Edward Meir, referring to the June 23 vote by Britain on whether it will leave the 28-member European Union.
"Given what is at stake, we think that gold will likely push higher until this uncertainty lifts, Thursday's downside reversal notwithstanding," Meir said.
Gold could get a further boost as a safe haven if a vote by Britain to leave the group pushes Europe back into a recession.
The Bank of England escalated its warnings about fallout from the referendum, saying it could harm the global economy and that sterling looked increasingly likely to fall further after
any "Out" decision.
"Leading into the Brexit vote, we expect gold to remain around current levels between the $1,270-$1,300 range. But after then all bets are off as everything depends on the results of the referendum," ANZ analyst Daniel Hynes said.
"If UK does leave the EU we could see prices touching $1,400 in the immediate aftermath of the referendum," Hynes said.
The dollar was up slightly on Friday, rising 0.1 percent to 104.37 yen , but it was still down more than 2.5 percent for the week, after hitting its lowest since August 2014 on Thursday.
The dollar index , which tracks the greenback against a basket of six major peers, slipped 0.2 percent and is set for a weekly decline of the same magnitude.
On Thursday, holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.20 percent to 902.53 tonnes, the highest since October 2013.
Silver , which slid 2 percent for its biggest one-day fall in about a month on Thursday, rose 1.1 percent to $17.33 and was nearly flat for the week.
Platinum and palladium were headed for a weekly decline despite rising on Friday by 1 percent and 2.1 percent respectively.