Update Gold set for biggest weekly rise since January as stocks, dollar slide

by **Cals** Sat 22 Aug 2015, 01:51

Update
Gold set for biggest weekly rise since January as stocks, dollar slide

LONDON (Aug 21): Gold steadied on Friday having hit its highest in more than six weeks and was heading for its biggest weekly climb since mid-January as more bad economic data from China rattled financial markets.
World stocks tumbled towards their worst week of the year, while the dollar index hit its lowest in nearly eight weeks after a Chinese factory data added to doubts that the Federal Reserve will raise interest rates next month.
Gold had already rebounded this week from July's 5-1/2 year low, boosted by minutes of the Fed's last policy meeting, which dented expectations for an imminent rise in U.S. rates.
Spot gold hit a peak of $1,168.40 an ounce and was at $1,153.60 at 1414 GMT, little changed from late on Thursday and up 3.5 % on the week. U.S. gold futures for December delivery were $1.90 at $1,151.30.
"The massive move we have experienced during the past couple of days ... was primarily on the back of dollar softness and qualms around emerging markets," said Naeem Aslam, chief market analyst at Ava Trade.
"The Chinese economic data release today has also helped the metal, as this presages more headwinds for the Fed."
"However, now we do need a new catalyst to drive the price any higher and next week's economic data could certainly fulfil this craving."
Gold has come under heavy pressure this year from expectations that the Fed would raise rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar.
Wall Street slumped at the open, falling for the fourth straight session, as the data from China spooked investors already worried about the pace of global growth.
The appetite for risk was further dented in Europe after Greek Prime Minister Alexis Tsipras resigned on Thursday.
"Risk aversion is rising again in financial markets, weighing on equities and in turn lifting gold," Julius Baer said in a note. "Gold could remain supported in the short term by further short-covering and safe-haven demand."
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, reported an inflow of 3.6 tonnes on Thursday, its first more than a week.
Among other precious metals, silver was down 2.5 % at $15.16 an ounce, platinum was down by 0.7 % at $1,021.99 and palladium was down 2.2 % at $604.22.