Gold on Friday held near two-week lows hit in the previous session as the dollar regained ground, with selling ahead of the Lunar New Year holidays adding pressure and leaving the metal on track to record its first weekly loss since late December.
Spot gold prices were down 0.3 per cent at $1,185.05 (£945.02) per ounce at 0252 GMT, having hit their lowest since Jan. 11 at $1,184.03 (£944.35) on Thursday.
U.S. gold futures fell 0.4 per cent to $1,185.50 (£945.37) an ounce.
“A combination of things including a strong dollar, thin volumes ahead of the Chinese (or Lunar) New Year and weak longs is putting pressure on the market,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“Most of Asia is already off for the holidays, which is a good time for many to short the metal … You can see the bids are very weak, which shows the demand right now,” he said.
Spot gold may break a support at $1,182 (£942.58) per ounce and fall to the next support at $1,171 (£933.81), as suggested by a Fibonacci retracement analysis and a double-top, according to Reuters technical analyst Wang Tao.
The week-long holiday that many in Asia take for the Lunar New Year is likely to keep the markets quiet, traders said.
The dollar edged up on Friday, rebounding from a seven-week low on optimism over the U.S. economic outlook and corporate earnings, although U.S. President Donald Trump’s protectionist policies raised uncertainties for global trade. [USD/]
“The government will publish its first estimate of fourth-quarter GDP on Friday, expected to come in around 2.2%,” said INTL FCStone analyst Edward Meir.
“We suspect the number will likely be stronger, leading to a stronger dollar and exerting more pressure on gold before Trump possibly comes to the rescue with another market surprise.”
The dollar index, which measures the greenback against a basket of currencies, rose 0.1 per cent on Friday to 100.500, after touching a seven-week low of 99.793 in the prior session.