Gold hit by strong U.S. data, but poised for weekly gain

Gold clung to overnight losses on Friday, hurt by strong U.S. economic data that bolstered prospects of higher interest rates, but the metal looked set to snap a three-week losing streak on earlier gains from a softer dollar.

Gold hit by strong U.S.


  • Spot gold was little changed at $1,181.36 an ounce by 0019 GMT, after losing 0.4 percent in the previous session.
  • Data on Thursday showed U.S. retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign · economic growth is finally gathering steam.
  • While other data showed a slight increase in new applications for unemployment benefits, the number remained in territory associated with a tightening labour market. The firming economy could likely prompt the Federal Reserve to raise interest rates in September.
  • Higher rates would dent demand for non-interest-paying bullion, and boost the dollar.
  • The greenback rose against a basket of major currencies on Thursday after the robust economic data, making gold more expensive for holders of other currencies and also diminishing the metal’s safe-haven appeal.
  • But it was poised to close the week lower by 1.3 percent, as it slid sharply against the Japanese yen earlier in the week following a comment by Bank of Japan Haruhiko Kuroda that the yen was already “very weak.”
  • The dollar softness is helping gold post a 0.8 percent gain for the week, after three straight weeks of losses.
  • Bullion got little support from the Greek debt crisis. The International Monetary Fund dramatically raised the stakes in Greece’s stalled debt talks on Thursday, announcing that its delegation had left negotiations in Brussels and flown home because of major differences with Athens.
  • The surprise IMF move came as the European Union told Greek Prime Minister Alexis Tsipras to stop gambling with his cash-strapped country’s future and take the crucial decisions needed to avert a devastating default.
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