Gold prices dipped on Friday as some investors locked in profits at the end of the week, and risk appetite strengthened, but expectations hovered that gold prices could move higher next week. Spot gold was down 0.3 percent at $1,287.70 an ounce by 1:46 pm EST (1846 GMT), on track for a 0.5 percent weekly decline. US gold futures for December delivery settled down $4.90, or 0.4 percent, at $1,287.30 per ounce.
"There's some liquidation of gold taking place, but light volume," said Bill O'Neill, partner at Logic Advisors in Upper Saddle River, New Jersey. "Next week will be important, because we are close to that $1,300 level and the market has the potential to break through and establish a slightly higher range," O'Neill added.
A key area of resistance remains at the $1,300 level, traders said. US Federal Reserve's minutes released Wednesday, regarded as "dovish," supported gold and slightly lowered market expectations of a March rate hike, said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam. A December rate hike has already been priced into the market, traders said.
The Fed's cautious view of inflation could lead to a longer period of low interest rates, providing a solid platform for gold investment, said Cameron Alexander, analyst with Thomson Reuters-owned metals consultancy GFMS. Higher interest rates tend to boost the US dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion. The US dollar index on Thursday hit its lowest since Sept. 26 against a basket of major currencies.
Dollar-priced gold typically rises when the US dollar index dips. Though gold prices were down Thursday, the weaker US dollar kept gold supported and within a range, said Bart Melek, head of commodity strategy at TD Securities in Toronto. Technology stocks led the S&P 500 and Nasdaq to record high closes during a strong start to holiday shopping in the United States, signaling investor risk appetite returning, traders said. Among other precious metals, silver dipped 0.3 percent at $16.99 an ounce, while platinum gained 0.8 percent at $940.50 an ounce.
Palladium dipped 1.39 percent to $997.25 an ounce. Silver slipped 1.8 percent for the week and is poised for its first weekly decline in three weeks. Platinum lost 1.1 percent for the week, on track for its first weekly fall in four. Palladium climbed 0.4 percent, its first weekly rise in three.
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