Gold prices log biggest weekly loss since June; fall 5%
Gold lost nearly 5 percent this week for its biggest weekly loss since the week of June 28.
New York/London: Gold rebounded on Friday on late bargain hunting, but poor technical momentum, easing tensions with Syria and expectations that the US Federal Reserve will unwind its monetary stimulus led to the metal's largest weekly loss since late June.
After falling as much as 1 percent to hit a five-week low earlier Friday, bullion ended up 0.3 percent on buying related to pre-weekend book squaring late in the session, traders said.
In late August, gold surged to a three-month high above USD 1,430 on concerns Western powers led by the United States would launch military strikes on Syria. Since then, the metal's price has lost almost 8 percent.
On Friday, Russia and the United States agreed to a new push to negotiate an end to Syria's civil war as they discussed a plan to destroy President Bashar al-Assad's chemical weapons in order to avert US air strikes.
"As tensions with Syria cool down, the risk premium that had quickly pushed the gold market sharply higher is now being taken off very quickly," said Sean McGillivray, head of asset allocation at Great Pacific Wealth Management.
Spot gold hit its lowest point since Aug. 8 at USD 1,304.56, and was last up 0.3 percent at USD 1,324.26 an ounce.
Bullion lost nearly 5 percent this week for its biggest weekly loss since the week of June 28.
US gold futures for December settled down USD 22 at USD 1,308.60 an ounce. Despite active trading in the last two sessions, volume was only 10 percent above its 30-day average, preliminary Reuters data showed.
On Thursday, gold fell 3.5 percent after a sudden price tumble in the futures market shattered investor confidence. The metal also broke below its 100- and 50-day moving averages in the previous session.
US DATA POINTS TO WEAKNESS
For the second consecutive day, choppy trading in precious metals came as outside markets including US equities and the US currency barely responded to economic indicators.
US data showed consumer confidence ebbed early this month and retail sales advanced just slightly in August, the latest indications of a lack of momentum in the economy. Another report on Friday showed an energy-led rise in wholesale prices last month but subdued inflation pressure.
Now traders turn their attention to the Federal Open Market Committee which is expected to release a policy statement at the end of its two-day meeting next Wednesday.
Consensus is building among analysts that the FOMC could announce a plan to begin slashing its USD 85 billion monthly bond purchase program.
Among other precious metals, silver climbed 2.1 percent to USD 22.20 an ounce. It lost 7 percent this week, its biggest weekly loss since late June.
Platinum rose 1.6 percent to USD 1,450.75 an ounce, while palladium gained 1.4 percent to USD 699 an ounce.