Gold prices head for first weekly drop of 2017

FILE PHOTO: Gold bars at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna

FILE PHOTO: Gold bars at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna

Published Jan 27, 2017

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London - Gold fell half a percent on

Friday and headed for its first weekly loss of the year, as a

two-day rise in the dollar prompted some investors to cash in

gains after the metal hit its highest since mid November earlier

this week.

The US currency pared some early gains but remained up 0.2

percent against a currency basket on Friday.

That pulled gold down from Tuesday's high of $1 219.59 an

ounce, and set it on track to end a four-week winning streak

with a 2 percent weekly loss.

Spot gold was down 0.4 percent at $1,184.11 an ounce

at 1035 GMT, while US gold futures for February

delivery were down $6.40 an ounce at $1,183.40.

"I think we've seen the high for the moment. We had a good

start to the year, but we've run out of steam around $1,220,"

ABN Amro analyst Georgette Boele said. "Overall, we're just

waiting for more positive news.

"On the data front, we have GDP data out of the US," she

added. "If these are a bit better, ...the dollar could rise."

Another leg higher in the US currency could spark fresh losses

in gold, she said.

The US economy is expected to have grown an annualised 2.2

percent in the last quarter, with a plunge in soybeans shipments

weighing on exports but buoyant consumer spending and rising

business investment underscoring its underlying momentum.

The dollar has climbed for two days as markets refocused on

Trump's pro-business policies and expectations the greenback

would gain from rising border tariffs, lifting it off this

week's seven-week lows and leaving it flat for the week.

The absence of Asian buyers, particularly in number one gold

consumer China, during the Lunar New Year holiday has also

weighed on the precious metal, dealers said.

"Most of Asia is already off for the holidays, which is a

good time for many to short the metal," Ronald Leung, chief

dealer at Lee Cheong Gold Dealers in Hong Kong, said.

"You can

see the bids are very weak, which shows the demand right now."

Silver was down 0.2 percent at $16.72 an ounce, while

platinum was 0.6 percent lower at $967.30.

Palladium was down 0.3 percent at $719.10, after

earlier hitting its lowest since January 4 at $708.97. The

autocatalyst metal has lost more than 8 percent so far this

week, its worst weekly performance since January 2016. 

REUTERS

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