Gold firms after worst losing streak since 1973
London (Mar 13) Gold firmed on Friday after nine straight sessions of losses, the precious metal’s worst losing streak in more than 40 years, as the dollar nursed losses following its extended rally.
Spot gold edged up 0.3% to $1,156.20 an ounce by 10.33am GMT. Gold’s losing run up to Thursday was the worst since August 1973, when prices fell 10 days in a row.
US gold for April delivery rose $3.40/oz to $1,155.30.
The metal was, however, headed for its sixth weekly loss in the past seven, down 0.8% so far and having hit its lowest in more than three months at $1,147.10 on Wednesday.
On Friday, gold was benefiting from an unchanged dollar against a basket of leading currencies after the greenback posted its biggest one-day fall in a month on Thursday.
Gold has taken a beating since a stronger than expected US jobs report last week stoked speculation the US Federal Reserve would raise interest rates soon. The next focus will be the Fed’s policy-setting committee which meets on March 17 and 18.
"The softer dollar is helping gold but that’s only temporary," Societe Generale analyst Robin Bhar said.
"The key event now is going to be the Fed meeting next Wednesday, so more clarity on the interest rates hike timing."
The dollar, which hit its highest in nearly 12 years this week, is widely expected to reach parity with the euro, due to the gap between US and European market interest rates.
A stronger dollar would continue to cloud the outlook for gold, making it more expensive for holders of other currencies, while higher interest rates usually dent demand for assets that do not pay interest such as bullion.
Gold could see some more gains but will face resistance at $1,166, said Phillip Futures analyst Howie Lee.
In a reflection of bearish sentiment, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.28% on Thursday to 750.95-tonnes, the lowest since January. It has been three weeks since the fund had any inflows.
Other precious metals have also taken hits. Silver was on track for a second straight weekly fall, down 0.3% at $15.52/oz on Friday, while palladium was heading for its worst week since mid-January even though the price was up 0.3% at $790.50/oz on Friday.
Platinum was up 0.9% at $1,121.50/oz, having fallen to its lowest since 2009 at $1,108.50 on Thursday.