Gold slips from one-month high after US data; palladium rises
Gold prices slipped on Friday from the previous day’s one-month high
as the dollar strengthened on a solid US jobs report, while palladium
was on track for its largest weekly gain since March on record high US
car sales.
US non-farm payrolls data that showed a slowing in hiring last month
but an increase in wages, supported the view that the US Federal Reserve
will press ahead with interest rate increases this year, analysts said.
Spot gold was down 0.7 percent at $1,171.70 an ounce by 2:51 p.m. EST
(1951 GMT), but up 1.75 percent on the week, its biggest weekly rise in
two months.
But with markets uncertain ahead of U.S. President-elect Donald
Trump’s inauguration on Jan. 20, investors turned cautious after gold
reached its highest since Dec. 5 at $1,184.90 on Thursday. “Any profit
that can be booked at this early stage is welcomed by most, so that’s
why we’re seeing a scaling back a bit,” said Saxo Bank analyst Ole
Hansen.
Non-farm payroll data showed that the United States added
fewer-than-expected jobs in December, though a rebound in wages pointed
to further interest rate rises from the Fed.
Higher interest rates exert downward pressure on the gold price by
increasing the opportunity cost of holding non-yielding bullion.
Chicago Fed President Charles Evans said the central bank could raise
rates three times this year if economic data comes in a bit stronger
than he expects, while Richmond Fed President Jeffrey Lacker said it may
have to raise interest rates quicker than markets currently predict.
“For 2017, we think we are starting from a clean base, leaving room
for seasonal drivers to breathe some life back into the yellow metal,”
said Christopher Louney, commodity strategist for RBC Capital Markets,
in a note.
“In fact, in our seasonality analysis we observe both the strongest
and most consistent positive price performance during Q1 over the last
11 years.”
Among other precious metals, palladium hit a five-week high of $757.70 an ounce before slipping back to $756.10, up 2.4 percent.
The metal used in vehicle catalysts to clean exhaust emissions has
risen 11 percent this week, its biggest gain since March, driven by high
U.S. sales of new cars and trucks hit a record high in 2016.
Spot silver was down 0.7 percent at $16.46, while platinum was 0.7
percent lower at $961.35, though it was on track for a gain of 6.8
percent this week, its strongest since July
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