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PRECIOUS-Gold set for biggest weekly drop in six as dollar advances

Published 25/09/2020, 08:07 pm
© Reuters.
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* Gold down 4.6% so far this week, silver slips nearly 15%

* Dollar heads for biggest weekly gain in almost 6 months

* Platinum, silver on track for largest weekly falls since March

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Recasts, adds comments, updates prices)

By Nakul Iyer

Sept 25 (Reuters) - Gold prices fell on Friday and were on track for their biggest weekly fall in six, hurt by a resilient dollar, which benefited from increased risk aversion at bullion's expense.

Spot gold XAU= was down 0.4% to $1,860.16 per ounce at 1249 GMT, while U.S. gold futures GCv1 were down 0.91 % at $1,859.80 per ounce.

Bullion was also set to post its steepest weekly contraction since mid August, falling 4.6%.

"We are seeing quite a significant shift as far as risk appetite is concerned, while that typically favours gold, for the vast majority of this year that has not been the case," said OANDA analyst Craig Erlam.

The risk-off move has favoured a major dollar rebound and that's been a massive drag for gold, he said, adding "I don't think its going to be much longer before we are talking about $1,800."

European shares were headed for their worst week since the end of July as Britain and France notched up record coronavirus cases. MKTS/GLOB

The greenback was on course for its biggest week of gains since early April, denting gold's appeal to holders of other currencies. USD/

News that the Democrats were working on a $2.2 trillion package, after U.S. Fed officials urged more fiscal stimulus, helped gold close higher for the first time this week on Thursday. is still "fatigue" in the market as gold has already priced in a lot of the favourable factors and there are a lot of investors already in the market, so it is unlikely that there will be many new ones, ABN Amro analyst Georgette Boele said.

In other metals, silver XAG= fell 1.9% to $22.78 per ounce and platinum XPT= slipped 1%, to $840.34. Both metals are on track for their biggest weekly falls since mid March.

Palladium XPD= was down 1.4% at $2,195.88 per ounce.

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