Gold Price News: Gold Ticks Lower to Pare Week-on-Week Gains

Gold prices edged lower on Friday, reversing some of Thursday’s gains to end the week with a 0.7% gain.

Prices rose to a three-week high of $2,666 an ounce on Friday morning, but fell back through the session to trade at around $2,640 an ounce later in the day. Intraday trading ranges have been compressed since mid-December, reflecting a subdued market over the seasonal holiday period.

The US dollar made a strong start to the new year, rising against other major currencies on Thursday, and this appeared to put gold prices under modest pressure by the end of the week.

In addition, the US Manufacturing PMI rose to 49.3 in December, above market expectations of 48.4, according to data released on Friday. The figures showed that US manufacturing activity contracted by the smallest amount for nine months in December, highlighting an improving trend. This may help to reduce the pressure for further interest rate cuts by the US Fed – a notionally bearish element for gold prices. 

Market positioning

Investor interest in gold saw a drop in the final days of December, with physically-backed gold ETFs showing net outflows of 0.2 tonnes in the week ending December 27^th. That compared with net inflows of 18 tonnes the previous week, according to World Gold Council figures: Gold ETF: Stock, Holdings and Flows. Meanwhile, net long positioning on gold futures contracts on the US Comex was unchanged at 757 tonnes in the week ending December 31^st.

Upcoming data

Looking ahead, Monday will bring the monthly US S&P Global Services PMI for December, and factory orders for November. Tuesday will see Euro Area inflation figures for December as well as the unemployment rate for November. These will be followed by the monthly US ISM Services PMI and the JOLTs job openings for November, providing the latest snapshot on economic conditions on both sides of the Atlantic.