NEW YORK: Gold prices ended flat on Friday as the market took a breather after surging to a four-month high on Thursday on fresh hopes for a new round of US monetary stimulus.
Platinum posted a second strong week of gains, up 5 per cent, and is up nearly 9 per cent this month after an outbreak of violence at a platinum mine in South Africa left 44 people dead. The African nation supplies about 80 percent of the world’s platinum.
Bullion was up 3.4 per cent on the week, its biggest weekly gain since the last week of January, spurred by minutes of the US Federal Reserve’s August meeting released Wednesday which showed policy-makers were ready to deliver more stimulus “fairly soon” unless the economy improves considerably.
A new round of quantitative easing — printing money to buy government bonds to keep long-term interest rates low — fuelled fears of inflation further down the track. The first two rounds of US quantitative easing have fuelled a doubling of gold prices in the last four years.
The news lifted gold out of the near $100 range it had held since mid-May and above its 200-day moving average for the first time since March. However, gold’s relative strength index suggests the market might be slightly overbought following a seven-session rally that was snapped on Friday.
“Gold has this week broken out of its well-defined, multi-month downward trendline. That resistance which kept gold in a range in the last several months should become a new level of support, suggesting gold is not going down but going higher,” said Adam Sarhan, CEO of Sarhan Capital.
Spot gold was down 3 cents at $1,670.01 an ounce by 2:22 p.m. EDT (1822 GMT). It hit $1,674.80 on Thursday, its highest price since April.
