Gold eased in a tight range early Friday, but was set to post its first weekly slide in three with expectations the Federal Reserve will keep its stimulus program on course through early next year.
The yellow metal is now trading close to its lowest in nearly two weeks after posting a 1.4% drop on Thursday. Sharp losses in the previous session was forced by a wave of profit taking in the wake of weak economic data and stronger dollar, which fueled some concerns that a possible December tapering will remain on the table, as the Fed repeated its optimistic view that the world`s largest economy was improving at a moderate pace.
Spot Gold was up 0.26% at $1,326 an ounce as of 03:18 ET, compared with the previous close at $1,323.06. The day`s range currently falls between $1,322.18 and $1,327.55.
Prices hit multi-month highs due to the partial government shutdown, debt-ceiling fiesta and disappointing September jobs report. However, the U.S. edged away from the brink of crisis that threatened to knock down the global economy and financial markets.
The federal paralysis was cured in the last half of the month and a debt-ceiling deadline took was delayed until February 7, which means Americans still face the possibility of another government shutdown early next year if the Congress fails to act before mid-January.
October ends a hectic month for commodities, and particularly gold, in a heavy manufacturing data as new updates from china to South Korea signaled manufacturing activity gained momentum last month. China`s factory PMI rose more than forecast. However, data from the U.S. may signal a slower manufacturing activity in October.
The sideway trade remains the theme in the gold markets as prices extended decline after testing the decending resistance shown on the daily chart above, retreating back below the 50-days SMA, invalidating the previous intraday bullish scenario.