Gold ended little changed on Friday, but the metal posted its sharpest weekly drop in more than two months as strong U.S. economic data raised uncertainty over the timing of a slowdown in stimulus measures.
On Wednesday, gold tumbled 2.5 percent after minutes of the Federal Reserve's October meeting showed U.S. central bankers could start scaling back monetary stimulus at one of their next few meetings. Disappointing physical demand from Asia and continued outflow in gold exchange-traded funds also pressured bullion prices.
"Investors are in a wait-and-see mode with no urgency to buy gold. The import restrictions imposed by India also curb demand when seasonal buying is the strongest there," said Rohit Savant, senior commodity analyst at CPM Group.
Eligible gold stocks sitting inside U.S. exchange warehouses have risen to a seven-month high, a sign physical demand has weakened after the pent-up buying seen following April's historic price drop, Comex exchange data showed. Asian dealers said there was a small pick-up in demand, but they were doubtful that would last as consumers may be waiting for the market to go even lower.
Spot gold inched up 31 cents to $1,242.66 an ounce by 3:07 p.m. The metal hit a fresh 4-1/2-month low of $1,236.29 in the previous session. U.S. gold futures for December delivery settled up 50 cents at $1,244.10 an ounce, with trading volume about 10 percent above its 30-day average, preliminary Reuters data showed.
Gold notched a 3.7 percent weekly drop, while silver also posted its biggest losses since mid-September, down 4.5 percent.
"The gold price drop seen earlier this week has weakened the technical picture and the next important level to watch is obviously $1,200," said Bernard Dahdah, precious metals analyst at Natixis.
GERMANY SELLS GOLD, ETF HOLDINGS DOWN
Data from the International Monetary Fund on Friday showed that Germany cut its bullion holdings for the second time in five months in October. The Bundesbank said it sold 3.421 tons of gold for federal coin minting.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 3.6 tons to their lowest since early 2009 at 856.71 tons on Thursday. Outflows have totaled 450 tons this year.
Silver dropped 0.5 percent to $19.82 an ounce. Platinum was down 0.2 percent to $1,381.99 an ounce, while palladium gained 0.4 percent to $713.15 an ounce.
HSBC cut its 2013 platinum price forecast to $1,500 an ounce from $1,580, saying weaker gold prices and a shift of investment into equities had hurt platinum this year.
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