- Gold fell to a four-month low of $1,243.90 per oz overnight - its lowest since July 27 - with a firmer dollar dampening investor appetite for the yellow metal, but the emergence of bargain hunting has seen gold bounce nearly $2 during early trading on Friday.
- The dollar index continues to strengthen, reaching a more than two-week high of 93.87 earlier in the session. The index was up by 0.05% at 93.83 as of 11.20am Shanghai time.
- Investors remain focused on the upcoming US Federal Open Market Committee meeting where it is widely expected that the US central bank will raise interest rates.
- “The market remains firmly fixated on the impending rate hike by the Fed; despite ongoing geopolitical risks, such as North Korean nuclear testing, as well as Brexit negotiations in Europe,” ANZ Research said. “Strong equity markets have also sapped investor demand for [gold]; driven in part by the US Republican’s new tax plan, which looks increasingly likely it will be implemented,” the bank added.
- “The non-farm payroll data tonight will set the short-term direction for the big dollar and therefore by default, also gold,” Jeffrey Halley, senior market analyst at Oanda, said.
- In the other precious metals, the spot silver price dropped by $0.050 to $15.765-15.785 per oz. Platinum gained $4 to $893-898 per oz and palladium was up by $2 to $1,012-1,017 per oz.
- On the Shanghai Futures Exchange, gold for June delivery was recently at 272.2 yuan ($41.13) per gram, and the June silver was at 3,724 yuan per kg.
Currency moves and data releases
- The index was up by 0.05% at 93.83 as of 11.40am Shanghai time.
- In other commodities, the Brent crude oil spot price rose by 0.03% to $62.07 per barrel while the Texas light sweet crude oil spot price inched up by 0.07% to $56.59.
- In equities, the Shanghai Composite was up by 0.16% to 3,277.19.
- In data on Thursday, US-based employers announced 35,038 job cuts in November - up 30% from the same month last year, while US unemployment claims came in slightly below expectations at 236,000.
- Data out already this morning showed China’s trade surplus expanded to reach 263.6 billion yuan in November, which bested expectations for a surplus of 231 billion yuan. Yuan-denominated exports were up by 10.3% against an expected 2.0% increase, while imports rose by 15.6% compared with a projected 12.5% gain.
- The economic agenda is busy today with UK manufacturing production, goods trade balance, construction output, consumer inflation expectations and industrial production. US data also out today includes monthly average hourly earnings, non-farm employment change, unemployment rate, preliminary University of Michigan consumer sentiment and inflation expectations and final wholesale inventories.
- In addition, investors will also be keeping an eye on China’s consumer price index and producer price index which are due at around 02.30am Shanghai time on Saturday.