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Last Updated : May 22, 2020 10:24 AM IST | Source: Reuters

Gold faces weekly decline on signs of growth picking up

Spot gold was trading at $1,727.39 per ounce by 0248 GMT, having dropped 1.4% on Thursday. U.S. gold futures rose 0.3% to $1,726.50.

Reuters

Gold steadied on Friday as an escalation in U.S.-China tensions underpinned bullion's safe-haven appeal, although positive economic data and easing lockdowns in some countries set up the precious metal for a weekly drop.

Spot gold was trading at $1,727.39 per ounce by 0248 GMT, having dropped 1.4% on Thursday. U.S. gold futures rose 0.3% to $1,726.50.

Bullion had rallied to its highest since October 2012 on Monday, but has since lost ground and is now heading for a 0.8% weekly decline.

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"The fundamentals are still supportive for gold. But, there was a slight improvement in the manufacturing activity in Europe and the U.S., the PMI data last night was slightly better," said Avtar Sandu, a senior commodities manager at Phillip Futures.

The euro zone economy's contraction eased in May, the Purchasing Manager Index (PMI) survey showed. Germany's private sector recession also improved on loosening of lockdown curbs that were put in place to prevent the spread of the coronavirus.

However, U.S.-China frictions dampened risk appetite, underpinning bullion and offsetting pressure on the metal's prices from the slightly better data.

Asian shares fell after Beijing's plan to impose a new national security legislation on Hong Kong drew a warning from U.S. President Donald Trump.

Gold has held ground above the key $1,700 per ounce level, building impetus to reach its 2011 peak in the coming quarters, Fitch Solutions said in a note.

The lower-for-longer interest rates with quantitative easing in full swing, macro and geopolitical uncertainty and strong investor flows should continue to support gold prices on a 6-12 month horizon, Fitch added.

Palladium gained 1.2% to $2,037.40 per ounce, and was looking to post its best week since end-March.

Platinum fell 0.6% to $827.62 and silver slid 1.5% to $16.81.

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First Published on May 22, 2020 10:15 am
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