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Gold prices edge lower but downside seen limited

Published 30/06/2017, 08:06
Gold slips lower but losses capped
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Investing.com - Gold prices edged lower on Friday, still weighed by the previous session’s upbeat U.S. economic growth data, although hawkish comments by several central banks limited the greenback’s gains.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery eased 0.08% to $1,244.91.

The August contract ended Thursday’s session 0.26% lower at $1,245.80 an ounce.

Futures were likely to find support at $1,236.50, the of low June 26 and resistance at $1,255.70, the high from June 28.

Official data on Thursday showed that U.S. gross domestic product rose 1.4% in the first quarter, revised up from the previous reading of a 1.2% expansion. Analysts had expected growth to remain unchanged from the prior revision.

The upbeat data added to expectations for additional U.S. rate hikes this year.

The Federal Reserve hiked interest rates earlier this month and left the door open for further increases later in the year, though a batch of mixed economic data recently has had investors wondering whether the Fed would be able to stay on its planned tightening path.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

However, the U.S. dollar’s gains were limited after European Central Bank President Mario Draghi indicated on Tuesday that the bank could soon start to unwind its quantitative easing program.

In addition, Bank of England Governor Mark Carney said Wednesday that some removal of monetary stimulus is likely to become necessary as spare capacity in the economy erodes.

A weaker dollar makes gold less expensive for holders of foreign currency.

Elsewhere in metals trading, silver futures for July delivery added 0.11% to $16.600 a troy ounce, while copper futures for September delivery gained 0.65% to $2.713 a pound.

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