Gold recorded slight gains on Friday to break a nine-day losing streak despite the dollar’s continued surge as the gold market avoided losses ahead of the Fed Reserve policy meeting next week.
Spot gold inched 0.1% up to $1154.35 an ounce after an earlier period of slight losses and gains to put an end to a nine day losing streak aided by disappointing economic data.
The precious metal had earlier recorded considerably growth after the University of Michigan’s consumer sentiment index for February showed the worst recoding since November last year.
According to MarketWatch, the disappointing data had increased hope among investors in the precious metal that the Federal Reserve would hold on its planned interest rate increase for much longer. The continued surge by the dollar against other currencies however thwarted these hopes.
“The narrative for the gold market hasn’t changed,” according to Friday’s 7:00’s Report, which offers daily markets commentary.
“The medium-term outlook remains bearish as the dollar remains in a well-defined uptrend but near term, there is a decent chance for a short-covering rally back to the high $1,100s or $1,200.”
US gold for April delivery also pared early gains to record a modest 50 cent- increase to close at around $1,152 an ounce.
The precious metal was, however, headed for its sixth weekly decline in seven weeks falling 1% for the week despite partially rebounding from the three-month low it hit on Wednesday at $1,147.70.
Gold has been on the decline since a better-than-expected monthly jobs report for February was released last week. This report tempered expectations of a sooner than expected interest rate increase by the Federal Reserve during its policy meeting next week.
“Gold is holding just above this key area of $1,150, but there is more downside risk as the dollar could continue its ascent ahead of next week’s Fed meeting, especially as it is so close to parity level with the euro,” Saxo Bank head of strategy Ole Hansen told Reuters.
To contact the reporter of the story: Jonathan Millet at email@example.com