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PRECIOUS-Gold unchanged as Asia stocks ease; U.S. GDP data in focus

Published 28/10/2016, 06:42 pm
© Reuters.  PRECIOUS-Gold unchanged as Asia stocks ease; U.S. GDP data in focus
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* U.S. third-quarter GDP data due later on Friday

* Gold may test support at $1,261 per ounce -technicals

* Platinum on track for biggest weekly rise in three months (Updates with comments and prices)

By Apeksha Nair

Oct 28 (Reuters) - Gold held steady on Friday amid an easing dollar and subdued Asian stocks, staying on course for a second straight weekly gain ahead of U.S. third-quarter GDP data expected later in the day.

Spot gold XAU= was little changed at $1,268.05 an ounce at 0715 GMT. It was up about 0.2 percent for the week so far.

U.S. gold futures GCcv1 slipped 0.1 percent at $1,268.80 per ounce.

Recent robust U.S. data has strengthened the case for an early interest rate hike, pressuring gold prices, and strong GDP numbers may push prices lower, said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

"U.S. third-quarter GDP will be closely scrutinised by markets tonight as investors try to gain more insight into a potential 'yes' or 'no' from the Fed in December," MKS Group trader Alex Thorndike said in a note.

U.S. interest rate futures are implying a more than 78 percent chance of the U.S. Federal Reserve raising interest rates by December, according to the CME Group's FedWatch tool.

Higher interest rates raise the opportunity cost of holding non-yielding assets such as gold and boost the dollar, in which the metal is priced.

The dollar index .DXY , which measures the greenback against a basket of currencies, was down 0.1 percent at 98.793. The unit was also holding near its highest in three months versus the yen. USD/

Asian stocks fell on Friday, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edging down 0.5 percent. MKTS/GLOB

Spot gold may test a support at $1,261 per ounce, a break below which could cause a loss to the next support at $1,251, according to Reuters technical analyst Wang Tao. markets may have largely absorbed the impact of a rate rise and moderately higher yields will not necessarily weigh on prices - as long as the U.S. dollar does not rally further, HSBC analyst James Steel said in a note.

Meanwhile, physical demand from emerging markets is coming back and should support higher prices, Steel said.

Demand for bullion in India is expected to pick up during the Dhanteras and Diwali festivals, when gold is traditionally given as a gift.

Silver XAG= was up 0.2 percent at $17.63 an ounce and platinum XPT= was up 0.4 percent at $966.80. Silver was on track to notch its biggest weekly gain in five. Platinum was heading towards its biggest weekly rise in three months.

Palladium XPD= rose 0.3 percent to $611.50 per ounce, but was still set to mark its fourth consecutive weekly decline.

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