Singapore: Gold held near a five-week low on Friday and was headed for a second straight week of losses, as strong global economic data and higher equities offset the metal's appeal as a safe-haven. Gold's decline despite simmering tensions in the Middle East and Ukraine does not bode well for prices in the near term, especially at a time when physical demand in Asia is sluggish.
Fundamentals
Spot gold was little changed at $1,292.37 an ounce, after losing nearly 1 per cent on Thursday. The metal hit $1,287.46 in the previous session - its lowest since June 19 - before recovering slightly. Gold has lost 1.4 percent of its value this week. Silver, platinum and palladium were also headed for weekly losses.
Bullion came under pressure after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labour market recovery was gaining traction.
China's factory activity expanded at its fastest in 18 months in July, boosting global equities. The metal had managed to stay above $1,300 an ounce for most of this week as violence continued over the Gaza strip, and tensions between the West and Russia over Ukraine remained high.
But sentiment has been hit after strong data, with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, seeing an outflow of 3.6 tonnes on Thursday. China's net overseas purchases of gold through key conduit Hong Kong fell to a 17-month low in June as a weaker yuan curbed demand from the world's biggest bullion consumer and as direct imports through the mainland flourished.
