SINGAPORE: Gold gained in Asian trade on Friday, recovering from a more than two-month low hit in the previous session, although prices were set for their biggest weekly drop in four due to a stronger dollar.
Silver headed for its worst week in three after retreating sharply from multi-year highs hit earlier this week when increased retail interest had propelled prices.
Spot gold rose 0.3% to $1,798.41 per ounce by 0802 GMT, after falling over 2% to their lowest since Dec. 1 on Thursday. US gold futures gained 0.4% to $1,799.10.
For the week so far, gold has shed 2.1% and is on course for its biggest decline since the week ended Jan. 8.
“There is some technical rebound as investors think Thursday’s drop was overdone, but overall trend in gold remains bearish on rising dollar and yields,” said DailyFX strategist Margaret Yang.
“The economic outlook is definitely brighter with vaccines bringing down daily COVID-19 infections, and the macro data is improving, undermining the demand for precious metals as a store of value,” Yang said.
“Gold is about to endure some serious short-term pain,” Jeffrey Halley, a senior market analyst at OANDA said, adding that gold’s role as an inflation hedge will return as the economic recovery starts accelerating by late second-quarter.
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