Gold Weakens On Stronger U.S. Data, Poor Demand Weighs

Gold extended losses into a second day on Friday after data released by the U.S. painted a slightly rosier picture, easing pressure on the Federal Reserve to maintain stimulus measures.

Gold prices had been pressurized on Thursday after Stronger-than-expected U.S. jobs data underscored expectations the Federal Reserve will begin slowing the flow of stimulus to the economy in coming months.

As of (09:47 GMT+3) on Friday June 13, gold for immediate delivery rose 0.53% or 7.30 points on to trade at $ 1,386.07 an ounce after opening at $1,385.09, having earlier hit a high of $1,387.66 and a low of $1,382.62.

The U.S. Labor Department reported that first-time claims for unemployment benefits declined by 12,000 last week, while continuing jobless claims fell by 2,000 the week ending June 1 st to 2,973 thousand.

Meanwhile, the Commerce Department said that retail sales climbed 0.6 percent in May, topping economists’ forecast of a 0.4 percent gain. The news sent equities markets higher, yet the U.S. dollar continued to be weak.

The dollar ticked higher on Friday, where the USDIX is currently trading around 80.77 after opening at 80.75, having so far hit a high of 80.80 and a low of 80.63.

Precious-gold has been pressured since April as investors anticipated a steadying U.S. economy would persuade the Federal Reserve to end its stimulus program sooner than planned.

The central bank`s bond-buying programs have been a key support for metals prices in recent years, as investors bought the assets as a hedge against inflation.

Asian Demand
Demand from the world’s top gold buyers, India and China, is seen slowing from peak levels seen in April after prices plunged to their lowest in years. Demand from India and China has been a big factor in holding up gold prices.

Net gold imports in India fell to $36 million in the second half of May from an average of $135 million in the first half, according to India’s finance minister.

This came after the Reserve Bank of India (RBI) extended imports restriction by a third, and curbed gold financing on banks early June in an effort to cut its current account deficit.

Silver was up about 0.52% at $ 21.77 an ounce, after touching its lowest at $21.711 and its highest at $21.865.

Holdings in the SPDR Gold Trust, the world`s largest gold-backed exchange-traded fund, fell 0.63 percent to 1,003.53 tons on Thursday, their lowest since February 2009.

Platinum and palladium
Platinum and palladium prices tumbled on Thursday amid escalating labor tension in South Africa, the world’s main supplier of primary platinum and, along with Russia, one of the two main suppliers of palladium.

Platinum fell sharply, after South Africa`s Association of Mineworkers and Construction Union (Amcu) has postponed serving Lonmin, with a strike notice to enable the union to attend mining sector talks to be held by South Africa`s deputy president on Friday.

South Africa accounts for about 72% of global platinum production, and 35% of palladium output. Rolling strikes through the industry last year curbed production and helped lift global metals prices.

Among other precious metals, platinum rose 0.61% to $ 1456.85 and palladium gained 0.59% to $ 733.90 .