Gold on Friday hit fresh two-week low on a stronger dollar, with selling ahead of the Lunar New Year holidays adding pressure and leaving the metal on track to record its first weekly loss since late December. Spot gold prices were down 0.5 percent at $1,182.87 per ounce at 0525 GMT, having hit their lowest since January 11 at $1,182.45. US gold futures fell 0.6 percent to $1,183. "A combination of things including a strong dollar, thin volumes ahead of the Chinese (or Lunar) New Year and weak longs is putting pressure on the market," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"Most of Asia is already off for the holidays, which is a good time for many to short the metal ... You can see the bids are very weak, which shows the demand right now," he said. Spot gold may break a support at $1,182 per ounce and fall to the next support at $1,171, as suggested by a Fibonacci retracement analysis and a double-top, according to Reuters technical analyst Wang Tao. The week-long holiday that many in Asia take for the Lunar New Year is likely to keep the markets quiet, traders said.
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