Global gold prices wobble

Reuters | Update:

gold. File PhotoGold prices marked time on Friday, after seeing its biggest one-day percentage loss in a month on Thursday, on a firmer dollar and increased investor appetite for riskier assets due to strong US data and corporate results.

Spot gold was mostly unchanged at $1,286.27 per ounce as of 0732 GMT.

US gold futures were steady at $1,286.90 an ounce.

Spot gold fell 0.8% on Thursday, its biggest one-day percentage decline in a month after risk sentiment improved.

"Markets are very much inclined towards the riskier assets. Investors are trying to price in breakthrough in (Sino-U.S trade) talks due to the conciliatory tone from both the camps," said Benjamin Lu, an analyst with Singapore-based Phillip Futures.

Strong corporate earnings have also boosted equities and the dollar, pressuring gold, he said.

US stock indexes extended gains on upbeat earnings as well as robust economic data that underlined the strength of the domestic economy. Meanwhile, the dollar index hit a two-week high against a basket of currencies.

The US housing data showed homebuilding increased more than expected in April, while unemployment benefits fell more than expected last week, pointing to sustained labour market strength that should underpin the economy.

The pullback in risk aversion lifted treasury yields. The rise in yields underpinned the US dollar.

A stronger dollar makes gold more expensive for holders of non-US currency.

Early in the week, spot gold prices rose 1.1%, registering their best one-day percentage gain in nearly three months after China announced that it would impose retaliatory tariffs on a range of US goods.

Even though trade worries have taken a backseat, investors are still wary of possible tensions emanating from a US bid to block China's Huawei Technologies from buying vital American technology.

"There is some risk-off sentiment in Asia with Huawei ban further escalating U.S-China trade sentiment. Gold is getting some support around $1,285 levels, but the dollar strength is limiting the metal's upside," Margaret Yang Yan, a market analyst at CMC Markets said.

Meanwhile, Thursday's fall in gold prices have worsened the technical picture for the metal.

Spot gold may break a support at $1,283 per ounce, and fall towards the next support at $1,264, according to Reuters technical analyst Wang Tao.

Among other metals, silver was down 0.2% at $14.52 and ounce, after hitting a low since Dec. 14, 2018 at $14.46 an ounce.

Platinum dipped 0.3% to $826.90 per ounce, having hit a two-month low at $820.50 earlier in the session.

Palladium was down 1.1% at $1,316.21 per ounce and slumped about 19% since the metal used in catalytic converters in car exhaust systems scaled a record peak of $1,620.53 in March.

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