Gold set for first weekly gain in six on slowdown fears

Gold prices were flat on Friday, pressured by an uptick in the U.S. dollar and fears over aggressive rate hikes, although heightened slowdown worries kept safe-haven bullion on track for its first weekly gain in six.

FUNDAMENTALS


* Spot gold held its ground at $1,717 per ounce, as of 0114 GMT, after rising more than 1% in the previous session. Bullion gained 0.6% so far this week.

* U.S. gold futures were up 0.1% at $1,715.50 per ounce.

* The dollar rose 0.2% against its rivals, making greenback-priced bullion more expensive for buyers holding other currencies.

* The European Central Bank raised interest rates by more than expected on Thursday as concerns about runaway inflation trumped worries about growth.

* Although gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion.

* Investors’ focus now shifts to U.S. Federal Reserve policy meeting due next week where policymakers are expected to raise interest rates by 75 basis points.

* The number of Americans enrolling for unemployment benefits rose for a third straight week last week, while factory activity slumped this month, the newest indications the U.S. economy is slowing under the weight of rising interest rates and high inflation.

* Japan’s core consumer inflation remained above the central bank’s 2% target for a third straight month in June, as the economy faced pressure from high global raw material prices.

* Spot silver was down 0.4% at $18.78 per ounce, platinum gained 0.3% to $874.50, and palladium edged 0.1% lower to $1,891.20.

DATA/EVENTS (GMT)


0030 Japan JaibunBK Mfg PMI Flash SA July

0600 UK Retail Sales MM, YY June

0600 UK Retail Sales Ex-Fuel MM June

0715 France S&P Global Mfg, Serv, Comp Flash PMIs July

0730 Germany S&P Global Mfg, Serv, Comp Flash PMIs July

0800 EU S&P Global Mfg, Serv, Comp Flash PMIs July

0830 UK Flash Comp, Mfg, Serv PMIs July

1345 US S&P Global Mfg, Serv, Comp Flash

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