Mubasher: Gold prices reached more than two-week low on Friday as the dollar pared losses on stronger-than-expected US economic figures, but growing worries over a slowing global growth offered floor to the safe-haven metal.
By, spot gold declined 0.40% to $1,308.06 per ounce, after hitting $1,309.55 per ounce earlier in the session, its lowest since 14 February, while US gold futures fell 0.51% to $1,309.40 per ounce.
The US dollar, which bounced back from three-week lows, was marginally higher against major rivals.
The greenback index, which gauges the US currency against a basket of six key peers, rose 0.21% to 96.3630.
US gross domestic product (GDP) came in at 2.9% in the fourth quarter of last year, as shown by the Commerce Department.
This was driven by a more resilient than expected performance, while it was slightly below of the 3% annual growth target for the past year.
“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,” Singapore-based Phillip Futures analyst Benjamin Lu told Thomson Reuters.
The benchmark 10-year government yield rose 3.1 basis points (bps) on Thursday, following the release of US data.
This can mean more demand for the greenback since it is used to purchase bonds, eclipsing the precious metal’s appeal.
Moreover, Chinese factory activity cooled to a three-year low in February, as export orders slid at the fastest pace since the global financial crisis.
The weakness is being felt across the region. Japanese manufacturing activity declined in February at the fastest pace since two years and a half as factories scaled back output amid fading domestic and export orders, a revised survey said on Friday.
The yellow metal lost support from $1,320-per-ounce level, technically, while Federal Reserve Chairman Jerome Powell’s testimony and negative news on China-US trade could not boost gold enough, 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.
