Gold steadies as dollar retreats, on way to best week in three

Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.
Simon Dawson | Bloomberg | Getty Images
Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.

Gold steadied on Friday en route to its first weekly gain in three weeks as the dollar weakened although the metal's advances were capped by stronger equities.

Spot gold rose 0.2 percent to $1,294.36 per ounce as of 10:20 a.m. The metal broke below $1,300 and hit a one-week low on Thursday, but prices have gained 0.3 percent so far this week.

U.S. gold futures settled $1.90 higher at $1,295.20.

"We're recovering a little bit after yesterday's big sell-off. The dollar strength really hurt precious metals and we're seeing some of that reverse with most currencies running a little higher versus the dollar this morning," said Chris Gaffney, president of world markets at TIAA Bank.

"We've got tame inflation, the trade situation is getting resolved and Brexit looks like it's going to be pushed down the road. So right now investors don't have any incentive to buy gold."

The dollar fell to its lowest in two weeks against key rivals and was headed for its first weekly decline in four weeks.

However, the stronger U.S. stock market, boosted by better-than-expected results from JPMorgan Chase & Co, a $33 billion energy deal and signs of stability in the Chinese economy, dented bullion's appeal.

A further dovish tone from the U.S. Federal Reserve and weaker global growth data could propel gold higher, Gaffney said, "but for now, it's going to struggle to get back above that $1,300 level.

Early in the week, bullion received support from increased buying by central banks and a dovish view from the European Central Bank as well as minutes from the U.S. Fed. However strong U.S. economic data on Thursday boosted the dollar and triggered a sell-off in gold.

Data showed weekly U.S. jobless claims fell to the lowest in nearly half a century and producer prices increased the most in five months in March.

"Given the marked decline we expect in U.S. equities this year, we suspect that safe-haven assets will soon surge," Capital Economics analysts said in a note.

"We think gold investment should be strong, particularly in the form of exchange-traded fund buying. As a result, we expect the price of gold to rally to $1,400 per ounce by end-2019."

Silver was up 1 percent at $15.10 an ounce.

Spot platinum rose 1.3 percent to $899.08 per ounce, heading for its fifth straight weekly gain.

Palladium was up 0.8 percent at $1,376.88 per ounce.