Stronger-than-expected U.S. economic statistics and lessening geopolitical concerns in Iran hindered bullion’s upward momentum, causing gold prices to slightly decline on Friday, extending losses from the previous session. By 09:18 GMT, spot gold had dropped 0.3% to $4,603.02 per ounce. But after reaching a record high of $4,642.72 on Wednesday, the metal is expected to gain roughly 2% this week. US gold futures for delivery in February fell 0.4% to $4,606.70.
According to Julius Baer analyst Carsten Menke, “there was a lot of momentum in the (gold) market, which seems to have faded slightly at the moment….the economic news flow out of the US has been causing some headwinds rather than tailwinds as of late, which is reflected in a somewhat stronger US dollar.” Due to favorable economic news on Thursday, which showed that initial jobless claims fell 9,000 to a seasonally adjusted 198,000 last week, below economists’ forecast of 215,000, the US dollar remained close to a six-week high.
For foreign customers, greenback-priced bullion becomes more costly due to a stronger dollar. Geopolitically speaking, Iranians contacted by Reuters on Wednesday and Thursday reported that protests seemed to have subsided since Monday.
In periods of economic and geopolitical unpredictability, safe-haven gold typically performs well. While bullion traded at a premium in China as demand remained solid ahead of the Lunar New Year, gold demand in India remained quiet this week as prices hit record highs once more, detracting from retail purchases. After reaching an all-time high of $93.57 in the previous session, spot silver was poised for a weekly gain of more than 14%, but it dropped 1.1% to $91.33 per ounce.
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