· Gold prices hit a two-week low on Friday as the dollar recouped losses on stronger-than-expected U.S. economic data, while mounting concerns over a slowdown in global growth offered support to the safe-haven metal.
As of 0655 GMT, spot gold was down 0.2 percent at $1,310.26 per ounce, after slipping to its lowest since Feb. 14 at $1,309.55 earlier in the session.
U.S. gold futures were down 0.2 percent at $1,313.10 per ounce.
· The dollar, which pulled back from over three-week lows, scaled a 10-week high against the yen and was marginally higher against major currencies.
The U.S. Commerce Department’s report showed a better-than-expected performance in the fourth quarter pushed gross domestic product (GDP) up 2.9 percent for the year, just shy of the 3 percent annual growth target in 2018.
· “Gold is still fundamentally supported for the longer term despite the bearish pressures we see for now due to slight rise in bond yields and a firm dollar,” said Benjamin Lu, an analyst with Singapore-based Phillip Futures.
The benchmark 10-year government yield was up 3.1 basis points on Thursday after the U.S. data.
“Asian economic data has weakened significantly and it continues to show that the economy has started to slow,” Lu said, adding gold was being supported by broad-based economic weaknesses.
· Factory activity in China contracted to a three-year low in February as export orders fell at the fastest pace since the global financial crisis.
Also, Japanese manufacturing activity contracted in February at the fastest pace in two-and-a-half years as factories cut back output amid shrinking domestic and export orders, a revised survey showed on Friday.
· Gold has lost the support from $1,320 level, technically and has not got enough boost from Federal Reserve Chairman Jerome Powell’s testimony and negative news on China-U.S. trade, Hong Kong-based bullion dealer Wing Fung said in a note.
“Concerning the slowdown of global economic growth, we are not pessimistic about gold,” Wing Fung said, adding the metal has a strong support at $1,300 level.
· Reflecting a drop in bullion prices, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.52 percent on Thursday.
· Gold may break a support at $1,311 per ounce and fall to the next support at $1,299, according to Reuters analyst Wang Tao.
· Gold Prices Break Chart Support, May Keep Falling on US Data
Gold prices fell as fourth-quarter US GDP data topped expectations, pushing the priced-in policy outlook implied in Fed Funds futures away from the dovish side of the spectrum. That lifted Treasury bond yields and the US Dollar, undermining the appeal of non-interest-bearing and anti-fiat assets.
US economic data is likely to remain in the spotlight through the end of the trading week. The Fed’s favored PCEinflation gauge, the manufacturingISM survey and an updated look at this month’s consumer confidence trends from the University of Michigan are all due to cross the wires. If they reinforce the sense that the economy is holding up better than expected, a replay of yesterday’s moves might be in order.
GOLD TECHNICAL ANALYSIS
Gold prices made good signs of topping with a break below support guiding the uptrend from mid-November. Sellers now aim to test a dense layer of support running through 1249.10. Breaking below that on a daily closing basis exposes 1276.50 next. The trend line has been recast as resistance at 1322.72, with a reversal back above that targeting the February 20 high at 1346.75.
· Among the other precious metals, palladium gained 0.2 percent to $1,546.10 per ounce, after retreating from its all-time peak of 1,565.09 scaled earlier in the week.
Platinum was flat at $869.87 per ounce, below its more than three-month high of $876 hit in the previous session.
Spot silver was down 0.6 percent at $15.51 per ounce.
Reference: Reuters, Daily Fx
Thai
Eng