Gold set for biggest weekly rise in six months as stocks, dollar slip
London (Dec 12) Gold prices steadied on Friday, on track for their biggest weekly rise since June, as the dollar retreated and sliding oil prices hurt risk appetite, prompting another drop in stocks.
Gold is up 3% so far this week. Weakness in stocks has prompted some investors to buy the metal as an alternative asset, while a drop in the US unit made dollar-priced bullion cheaper for other currency holders.
Spot gold was flat at $1,227.30 an ounce at 9.56am GMT, while US gold futures for December delivery were up $2.30/oz at $1,227.90.
"Gold and silver have both had a very good week, going against the trend seen elsewhere," Saxo Bank’s head of commodity research, Ole Hansen, said.
"We have reached levels which short sellers have been attracted to in the past and this may slow the positive momentum that has emerged during the past week.
"Overall there is a feeling out there that traders are now going defensive on their positions and this is weakening the dollar, thereby adding some support to precious metals."
The dollar index was down 0.3% on Friday and European stocks slid another 1.4%, with further declines in the price of oil hitting energy stocks and political concerns over Greece also curbing risk appetite.
Benchmark Brent crude oil futures fell 1.3% to below $63 a barrel, the lowest since July 2009, hurt by a global supply glut and a sluggish demand outlook. Brent is down 8% this week, and 45% below its June peak.
An improvement in sentiment towards gold was seen in the holdings of the world’s top bullion-backed exchange-traded fund, SPDR Gold Trust, which rose 0.13% to 725.75-tonnes on Thursday, up nearly 5-tonnes this week.
That marks a second straight week of inflows, and the biggest weekly increase in its holdings since early July.
"The longer gold holds above $1,200, the more it may attract fresh buying and gold ETFs may begin to build," HSBC analysts said in a note.
Among other precious metals, silver was up 0.5% at $17.17/oz, while spot platinum was up 0.2% at $1,240.05/oz and spot palladium was down 0.1% at $815.72/oz.
Source: Reuters
