Gold dipped on Friday and looked set for a third successive weekly loss as strength in global equities, which offset a falling dollar, and uncertainty over the timing of a U.S. rate rise pegged prices in a narrow range.
World stocks hit all-time highs on Friday as positive corporate updates in Europe and a post-dotcom-boom peak for the U.S. Nasdaq stoked investor optimism.
Spot gold was down 0.3 percent at $1,190.55 an ounce at 0940 GMT, while U.S. gold futures for June delivery were down $4.30 an ounce at $1,190.00.
Spot prices are down nearly 1 percent this week, their biggest weekly loss in seven weeks.
“The news this week in general has been gold-friendly – weaker dollar, weaker U.S. data and Middle East tensions,” Saxo Bank analyst Ole Hansen said. “But it has failed to ignite, leaving the metal rangebound for now.”
“The stock market remains well behaved, and while that continues, the demand is just not strong enough.”
Strength in stocks balanced a drop in the dollar, with the euro hitting two-week highs against the U.S. unit after upbeat German business sentiment data and as fears for a Greek default eased.
Weak data on U.S. jobless claims, manufacturing and home sales have hurt the dollar this week, but boosted uncertainty over whether the Federal Reserve will conduct its first U.S. rate rise in nearly a decade in June or September.
Attention is turning to the Fed’s policy meeting next week for stronger clues on when the U.S. central bank will start increasing rates. That would raise the opportunity cost of holding non-yielding bullion, while boosting the dollar.
“Should the (Fed) … prove hawkish, we may expect gold to fall swiftly and embark on a new downtrend to $1,145,” said Howie Lee, an analyst at Phillip Futures.
Traders were also eyeing the Asian physical markets for signs of increased demand that would support global prices.
In China, the second-biggest consumer, premiums fell to about $1 an ounce over the spot from about $2 in the previous day, while in top consumer India, demand is set to taper out after strong sales during Tuesday’s Akshaya Tritiya festival.
Silver was down 0.5 percent at $15.79 an ounce, while platinum was down 0.1 percent at $1,131 an ounce and palladium was up 0.4 percent at $770.45 an ounce.