April 28, 2017 / 10:03 AM / in 3 months

PRECIOUS-Gold firms as dollar, stocks retreat, but still eyes weekly loss

4 Min Read

    * Forecast-beating euro zone inflation data boosts euro
    * Gold still set for second weekly loss, down 1.3 pct
    * Palladium rallies to two-year high at $824.70/oz
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices)
    By Jan Harvey
    LONDON, April 28 (Reuters) - Gold rose on Friday as
forecast-beating euro zone inflation boosted the euro against
the dollar, while global stock markets retreated from
Wednesday's record highs as concerns about global trade subdued
appetite for cyclical assets. 
    The metal remains on track for its biggest weekly drop in
seven, however, after appetite for nominally higher-risk assets
sharpened early in the week at gold's expense.
    Spot gold        was up 0.3 percent at $1,267.61 an ounce by
1153 GMT, while U.S. gold futures        for June delivery were
up $3.30 at $1,269.20. Spot gold was down 1.3 percent from last
Friday's level, its biggest weekly loss since early March.
    "Most of the correction should be done by now," Commerzbank
analyst Daniel Briesemann said. "We see good support at this
level. There are a lot of uncertainties remaining."
    "The high-risk appetite at the beginning of the week seems
to have abated, at least for now. This has definitely helped
support the gold price, and the dollar is supportive as well."
    The euro strengthened towards 5-1/2 month highs versus the
the U.S. currency while euro zone bond yields and stocks rose
after data showing euro zone inflation beat expectations in
April.             
    Gold suffered earlier this week after a strong showing in
the first round of the French elections from Emmanuel Macron,
the centrist candidate largely favoured by financial markets.
That tempered some fears that a candidate less friendly to the
European Union could win through.
    A three-day rally in stock markets stalled after a largely
expected U.S. tax cut plan, however.
    "Gold prices remained stuck in a $1,260-$1,270 range as
traders tried to take stock of the flurry of policy measures
from U.S. President Trump," ANZ said in a note. 
    "Geopolitical concerns have also eased, with election polls
suggesting Emmanuel Macron's lead has increased."
    Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Shares      , fell 0.1 percent to 853.36 tonnes
on Thursday. Holdings are down by more than 6 tonnes since
Tuesday.          
    Banks remain stubbornly cautious on gold's price prospects
this year in spite of a strong first-quarter performance, a
Reuters poll showed on Friday, as the prospect of higher
interest rates take the shine off the metal.            
    Among other precious metals, silver        was up 0.8
percent at $17.36 an ounce, while platinum        advanced 1.3
percent to $952.50.
    Palladium        was up 1.1 percent at $823.70, having
touched a two-year high of $824.70. It was the only weekly
gainer among the precious metals, set to finish the week with a
3.6 percent rise. The Reuters poll predicted palladium would
register its strongest year on record in 2018.             

 (Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; Editing by David Goodman)
  

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