Gold prices advanced for the first time in four days on Friday on an increase in holdings in gold-backed exchange traded products but its upside was capped by a resurgent dollar and uncertainty on the timing of the Federal Reserve’s Interest hike timing.
According to data compiled by Bloomberg, Bullion-backed ETPs rose by more than 3.9 million metric tons-the most since February 23- on Thursday to 1620.1 million tons.
Gold prices were, however, on course for their first weekly decline in more than four weeks after surrendering gains after the minutes of the latest Federal Reserve policy meeting indicated that some officials still favor a June hike.
The bullion was about 0.3% in the red for the week having pulled back from its seven week highs on Monday after achieved after Last Friday’s weaker than expected non-farm payrolls data.
A rate hike would spell gloom for non-interest bearing commodities like gold.
Gold for June delivery- the precious metal’s most active contract- was up more than $9.90 an ounce or 0.9% to $1204.30 an ounce on the Comex division of the New York Mercantile Exchange. The contract had slipped more than 2.1% in the preceding three days.
Gold for immediate delivery was up about 1% at 1,206.46 an ounce. Unmoved initially, the contract gained traction after a break of technical resistance at $1,196 an ounce saw a flow of orders.
“This move is coming during a week when we didn’t really have any gold-positive news but …the way gold is putting up a fight at the moment is potentially giving some confidence to the market,” Saxo Bank senior manager Ole Hansen told Reuters.
“But to make headwinds above the resistance area around $1,225 we need to see some real buying coming in.”
Spot silver was up 1.7% to $16.39 an ounce while Silver futures advanced 1.3% to $16.38 an ounce.
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