Online Reporter
Gold fell further below US$4 000 an ounce, while silver also eased from a rally that sent prices to the highest since 1980.
Bullion traded near US$3 955 an ounce on Friday, after losing 1.6 percent in the previous session. Technical gauges show the precious metal has been in overbought territory for much of the past month, prompting some investors to lock in gains after a rapid four-day winning streak that pushed prices to a record high of US$4 059.31 an ounce on Wednesday.
“The strong momentum that had delivered new highs day after day gave way, with some traders keen to reduce exposure from extended positions and lock in performance,” Chris Weston, head of research at Pepperstone Group, said in a note.
Silver reached US$51,235 an ounce on Thursday, the highest in more than four decades, before paring gains. The metal is still up about 70 percent this year, easily outpacing gold’s advance.
The rally is part of a broadening interest in precious metals, fuelled by fears of an overheating equities market, fiscal pressures in the US, and threats to the Federal Reserve’s independence.
Gold’s selloff on Thursday coincided with a slide in US equities. While bullion is often viewed as a haven during market turmoil, it can drop alongside risk assets when investors liquidate positions to cover losses elsewhere.
Nevertheless, bullion is still on track for an eighth weekly advance.
Precious metals have gained momentum as part of the so-called “debasement trade”, in which investors flock to the perceived safety of Bitcoin, gold and silver while pulling away from major currencies like the dollar. Concerns the value of financial securities will be eroded by inflation and unsustainable fiscal deficits are boosting their appeal.
Spot gold was down 0,6 percent to US$3 955.08 an ounce at 12:13 p.m. in Singapore. The Bloomberg Dollar Spot Index eased 0,1 percent, after rising to a 10-week high in the previous session. — Bloomberg
