Ishaan Arora
Jan 16 (Reuters) – Gold prices extended losses on Friday after stronger-than-expected U.S. economic data dampened expectations for a faster rate cut by the Federal Reserve, while waning geopolitical frictions led to shrinking safe-haven demand for gold.
Spot gold fell 0.4% to $4,598.52 an ounce as of 0426 GMT. However, the metal is on track to gain about 2% on a weekly basis after hitting a record high of $4,642.72 on Wednesday.
U.S. gold futures for February delivery fell 0.5% to $4,601.80.
Capital.com analyst Kyle Rodda said: “The decline (in gold) started primarily when the likelihood of some kind of U.S. intervention in Iran’s social unrest (diminished)… (and) we saw data coming out of the U.S. that suggested a rate cut was not urgent.”
U.S. Labor Department data showed that weekly initial jobless claims fell by 9,000 to a seasonally adjusted 198,000, lower than the 215,000 expected in a Reuters poll of economists, and the dollar was expected to rise for a third consecutive week. [USD/]
A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies. A low interest rate environment generally favors non-yielding gold.
People in Iran contacted by Reuters on Wednesday and Thursday said protests appeared to have subsided since Monday, while U.S. President Donald Trump has struck a softer tone on military intervention in the country.
SPDR Gold Trust, the world’s largest gold exchange-traded fund, said its holdings increased 0.05% to 1,074.80 tons on Thursday, the highest level in 3-1/2 years. [GOL/ETF]
Silver has become the most crowded commodity trade on the market as individual investors have been snapping up the metal at an alarming rate, according to a Thursday report from Vanda Research.
Spot silver fell 1.8% to $90.70 an ounce, but was on pace for a weekly gain of more than 13% after hitting an all-time high of $93.57 in the previous session.
Spot platinum fell 2.8% to $2,342.14 an ounce, while palladium fell 2.3% to $1,759.07 an ounce after hitting a one-week low.
(Reporting by Ishaan Arora and Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)
