Friday, 24 October 2014

Gold poised for weekly loss on strong U.S. data, dollar

A woman looks at a gold chain at a jewellery showroom on the occasion of Dhanteras, a Hindu festival associated with Lakshmi, the goddess of wealth, at a market in Mumbai October 21, 2014. REUTERS/Danish Siddiqui
A woman looks at a gold chain at a jewellery showroom on the occasion of Dhanteras, a Hindu festival associated with Lakshmi, the goddess of wealth, at a market in Mumbai October 21, 2014.
(Reuters) - Gold dipped for a third session on Friday and was headed for a weekly loss as a firmer U.S. dollar and robust economic data dented the metal's appeal as a hedge.
FUNDAMENTALS
* Spot gold eased 0.1 percent to $1,230.48 an ounce by 0020 GMT, after slipping over 1 percent in the previous two sessions.
* The metal is headed for a weekly loss of 0.6 percent - its first drop in three weeks - as the dollar gained after two weekly declines in a row.
* Palladium was the best performer among precious metals for the week, with a near 4 percent jump.
* The dollar rallied on Thursday as investors plowed cash back into riskier asset classes, underpinned by promising U.S. data and stronger-than-expected manufacturing reports in Europe and China.
* A strong greenback makes gold more expensive for holders of other currencies.
* Data on Thursday showed that new claims for U.S. unemployment benefits held below 300,000 for a sixth straight week last week, suggesting the labour market was shrugging off jitters over a slowing global economy.
* Euro zone businesses performed much better than forecasters expected this month and China's vast factory sector grew a shade faster, but U.S. manufacturing activity sputtered to its slowest since July, underscoring the uneven nature of the post-crisis global economy.
* The data, however, still managed to calm investor nerves after fears of a global slowdown prompted a sharp sell-off in global equities and the dollar, dimming gold's appeal as a safe-haven.
* In news from the miners, Peruvian precious metals miner Hochschild posted a decline in third-quarter production, hit by lower grades at its Pallancata mine and a two-week strike at its Arcata asset, but said it was still on track to reach its annual target.
* African Barrick Gold Plc tightened its costs target for the full year as it increased output while also cutting jobs to beat the sharp drop in gold prices.