Commodities

Gold heads to first weekly loss in month on robust dollar and weak demand

2019-11-08 11:58:46 GMT (Economies.com)

Gold rose slightly in the European session on Friday, in attempts to rebound from the 5-week low it hit yesterday, but still on way for its first weekly loss in a month on weak safe-haven demand and robust dollar performance against a basket of currencies.

 

Gold fell by 0.3% to $1,472.79 an ounce, after opening at $1,467.94, with a session-low of $1,465.72.

 

The yellow metal closed lower by 1.5% yesterday, to mark its third daily loss in 4 days, after it hit a 5-week low of $1,460.57 after the US dollar surged.

 

During this week, gold prices have lost 2.7% so far, on way for its first weekly loss in a month and the largest weekly loss since April 2017.

 

Otherwise, the US dollar rose by 0.1% on Friday, to extend its gains for the fifth straight day, and head to a 3-week high of 98.23 points, to reflect the US currency robust performance against a basket of currencies.

 

This broad rally by the US dollar is due to the recent developments about the US-China trade deal, and the strong US services sector data during October.

 

With the trade war risks receding and the continued positive data, it's unlikely that the US Federal Reserve will cut the interest rates for the fourth during this year.

 

Demand on safe havens has weakened sharply this week due to the positive developments in the US-China trade talks and the near signing of the first phase trade deal.

 

These developments improved the risk appetite as investors shifted to higher-yielding assets, with the US stocks jumping to fresh all-time highs, and the European hitting 4-year highs.

 

Gold holdings at the SPDR Gold Trust, fell on Friday by 1.47 metric tonnes, with a total of 914.38 Mt (the lowest since September 23rd).

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