Gold holds steady near 11-month low in run-up to Christmas

By Investing.com / December 22, 2016 / in.investing.com / Article Link

Investing.com - Gold prices were little changed near last week's 11-month lows on Thursday, with liquidity fading in the run-up to the Christmas weekend.

Gold for February delivery on the Comex division of the New York Mercantile Exchange dipped 45 cents, or 0.04%, to $1,132.75 a troy ounce by 3:55AM ET (08:55GMT), after falling 40 cents, or 0.04%, in the prior session.

Prices of the yellow metal sank to $1,124.30 last week, a level not seen since February 2.

With market volumes beginning to thin out ahead of the year-end holiday period, investors will focus on U.S. economic data later in the day for potential catalysts.

The final revision to third-quarter GDP is released at 8:30AM ET (13:30GMT), along with weekly jobless claims and durable goods orders for November. Personal income and spending and PCE prices are released at 10:00AM ET (15:00GMT).

Both data sets could sway market expectations around the pace of interest rate increases by the Federal Reserve in 2017.

The dollar lost some steam on Thursday, slipping from its 14-year-high against a basket of currencies as investors took profits ahead of the end of the year.

The dollar index dipped 0.1% to 102.94 in early trade. The index climbed to 103.62 on Tuesday, the strongest level since December 2002.

Market analysts warned that the outlook for gold remains cloudy in the near-term, given expectations for higher U.S. interest rates in the months ahead.

The Fed hiked interest rates for the first time in a year last week and projected three more increases in 2017.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Also on the Comex, silver futures for March delivery shed 3.2 cents, or 0.2%, to $15.94 a troy ounce during morning hours in London, not far from an eight-month low of $15.67 logged on Tuesday.

Meanwhile, platinum slipped 0.2% to $912.70 and palladium dropped 0.7% to $655.45 an ounce, the lowest level since November 8.

Elsewhere in metals trading, copper futures declined 1.9 cents, or 0.75%, to $2.478 a pound. Prices of the red metal slumped to $2.469 earlier, a level not seen since November 18.

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