Gold prices held near 3 and a half month highs on Friday. It stays on track for the fourth straight weekly gain as attention turns to U.S. payroll data due later in the day.
Spot gold dropped 0.1 percent at $1,321.86 on Thursday due to a weaker dollar but rose 1.5 percent this week. Its 14-day relative strength index (RSI) was at 73.
According to a technical analyst, if an RSI reaches over 70, it means that a commodity is overbought. It can then call for a price correction.
Other precious metals, like spot palladium stayed firm at $1,096.40 following a record-high reached on Thursday at $1,105.70.
Last year, Palladium’s price surged 56 percent due to fears of shortage. This was driven by the growth in Chinese car sales, tightening emissions controls, and diesel cars being pressed back in Europe.
Spot silver fell 0.1 percent to $17.21 following its highest record in six weeks at $17.27 during the preceding session.
Spot platinum, on the other hand, rose 0.2 percent to $961.90 an ounce. It hit a 3 and a half month high on Thursday at $965.40.
Elsewhere, gold prices also climbed in Asia on Friday. Gold futures for February delivery were up 0.12 percent to $1,323.20 per troy ounce on the New York Mercantile Exchange’s Comex division.
Gold prices moved off session lows overnight, despite coming under pressure amid investor concerns. They were afraid that the continued U.S. economic data upbeat would give the Fed further strength to raise rates more than it already is in.
The dollar index, which weighs the greenback’s strength against a basket of six major currencies, was weighed down by the weakness of the dollar against euro. It was poised for a 0.3 percent loss this week during the probe of a three-month low of 91.751.
“There are some new long-positions after gold crossed $1,300 and they are trying to push prices up … We can see people buying at corrections,” said chief dealer Ronald Leung.
“The dollar will be the key to gold’s moves going forward … Markets are waiting for more clues on the pace of the interest rate hikes and how the tax reforms are going to help the U.S. economy.” Leung further noted.
U.S. private employers added 250,000 jobs in December, according to ADP Research Institute data, the biggest monthly increase since March. It surpassed expected 190,000 job gains.
Investors are now waiting for Friday’s U.S. non-farm payroll reports which are predicted to show 190,000 job gains for December.
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