Gold prices edged up on Friday, supported by a weaker dollar amid worries about a possible U.S. government shutdown, but the precious metal was still on track for its first weekly drop in six weeks.
Spot gold was up 0.3 percent at $1,331.10 an ounce by 0324 GMT. Gold on Thursday touched its weakest level since Jan. 12 at $1,323.70, having fallen from recent four-month highs.
Spot gold has fallen 0.5 percent so far this week, its worst since the week-ending Dec. 8.
U.S. gold futures were up 0.3 percent at $1,331.40.
The U.S. dollar fell amid worries over a possible U.S. government shutdown. The dollar index was down 0.1 percent at 90.394 on Friday.
Legislation to avoid a U.S. government shutdown at midnight on Friday advanced in Congress, as the House of Representatives on Thursday night approved an extension of federal funds through Feb. 16, although the bill faced uncertain prospects in the Senate.
“The overall run in gold has been overdone ... People have to be careful with further allocations in gold and other asset classes as well for now,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“The overall weakness in U.S. dollar is over ... I can’t be more cautious on gold price at the moment.”
The dollar has fallen since 2017 largely on expectations central banks besides the Federal Reserve are seeking to end their policy of ultra low, even negative, rates that they adopted to combat the 2008 global financial crisis and the recession that followed.
The U.S. Federal Reserve should raise interest rates three to four times in both 2018 and 2019, Cleveland Federal Reserve Bank President Loretta Mester said on Thursday, a pace that is a bit faster than many of her fellow policymakers prefer.
“The fundamentals remain the same with the large trading range remaining intact at $1,200 to $1,400, with no major change in global political tensions or rate hike outlook,” To said.
Spot gold is still targeting $1,311 per ounce, as suggested by a small double-top and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao.
Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.42 percent to 840.76 tonnes on Thursday from Wednesday.
Among other precious metals, silver rose 0.5 percent to $17.01 per ounce.
Platinum rose 0.2 percent to $1,002, while palladium fell 0.5 percent to $1,105.
Reporting by Nallur Sethuraman in Bengaluru; editing by Richard Pullin
© Reuters News 2018