Gold prices rose on Friday from six-month lows as a weaker US dollar prompted bargain hunting, but bullion was on track for weekly and monthly declines and analysts said many speculators maintained short positions, leaving prices vulnerable to further losses. Spot gold added 0.4 percent at $1,252.81 an ounce by 1:34 p.m. EDT (1734 GMT). On Thursday, it touched $1,245.32, its lowest since Dec. 13, 2017.
US gold futures for August delivery settled up $3.50, or 0.3 percent, at $1,254.50 per ounce. "Gold is finding support from the weak US dollar and firm euro...and is at least recouping the losses it incurred yesterday," Commerzbank said in a note. Despite Friday's gains, gold was down 1.2 percent so far this week, headed for a third straight weekly decline. For the month, spot gold was down about 3.4 percent, on track for its biggest monthly drop since November 2016.
"At the end of the month and end of the quarter, people try to buy gold to boost it," added Michael Matousek, head trader at US Global Investors. Both spot gold and platinum prices were headed for their weakest quarters since year-end 2016. "The shorts are still in control and the momentum is negative. The dollar and US Treasuries have taken over the role of safe haven this month and as long as the trade war is creating uncertainty then that will probably prevail," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Meanwhile, spot silver gained 1.1 percent at $16.13 an ounce. It was heading for a 1.9 percent weekly drop and 1.4 percent monthly decline. Palladium rose 0.7 percent at $951.45 an ounce. It was down 3.4 percent for the month, its weakest month since March. Platinum added 0.2 percent at $849.24 per ounce. During the session it hit its lowest since January 2016 at $837.30. It was down 8 percent for the quarter and 5.8 percent for the month.
"Speculative financial investors are currently betting on falling platinum prices to a greater extent than ever before, and platinum ETFs have been seeing continual outflows for months," Commerzbank said in a note.