Gold firmed near $1,200 an ounce on Friday but the metal was headed for its second straight weekly drop, weighed down by uncertainty over the timing of an interest rate increase by the US Federal Reserve. Spot gold edged up to $1,200.80 an ounce by 0701 GMT after dropping 0.3 percent on Thursday. The metal has lost 0.6 percent this week.
Expectations that the US central bank would start raising rates in June have been reassessed after recent sluggishness in US economic data and many are now betting that policy will not be tightened until September
Strong data could still prompt the US central bank to raise rates sooner, which would dent demand for bullion, and the uncertainty has led to caution in bullion markets.
"Until upcoming economic data makes the US rate picture a little more clear, we believe gold is likely to remain stuck in choppy, directionless trading in the near term," said HSBC analyst James Steel.
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