Gold prices were a touch softer on Friday as the dollar reversed earlier losses, while palladium marked a fresh 18-month high, extending the previous day’s gains on strong demand due to the launch of a new investment tool.
Gold futures got a lift on Thursday in defensive buying ahead of possible measures by the Commodity Futures Trading Commission, the top U.S. futures market regulator, to rein in speculation in metals trading, dealers said.
CFTC Chairman Gary Gensler said it will discuss possible position limits on gold and silver contracts at a March meeting.
On Thursday the CFTC unveiled proposals to limit trading in energy contracts.
Kazuhiko Saito, a chief analyst at Tokyo-based commodities broker Fujitomi Co Ltd, said the gold market was trying to gauge direction after recent economic data suggested sluggish growth in the U.S. economy, in contrast to some positive numbers from other countries.
On Thursday, the dollar was hurt by weaker-than-expected retail sales numbers for December and higher jobless claims.
“On the other hand you have the solid numbers from Australian jobs data, and this is pulling gold both ways,” Saito said.
The upbeat Australian jobs data has fuelled talk the Reserve Bank of Australia (RBA) may hike at its next meeting in February.
Spot gold was at $1,139.95 per ounce as of 0413 GMT, compared to New York’s notional close of $1,142.15.
U.S. gold futures for February delivery were at $1,140.40 per ounce, compared to $1,143.00 an ounce on the COMEX division of the New York Mercantile Exchange.
Platinum and palladium have both been boosted by strong investment demand from the launch of a new exchange-traded fund (ETF) backed by the metals in New York.
A U.S. subsidiary of London’s ETF Securities launched the products last Friday, and takeup has been healthy.
Spot palladium hit a fresh 18-month high on Friday, rising as high as $450 per ounce, versus $441.50 in New York.
Spot platinum rose as high as $1,618.50 per ounce, up from $1,607.00 in New York.
Fujitomi’s Saito said: “Platinum is also drawing attention as it is still the most viable metal for catalysts.”
Apart from jewellery, platinum is also used as an auto catalyst to clean car exhaust fumes.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,113.750 tonnes as of January 14, down 0.2 percent from the previous business day.
The world’s largest silver-backed exchange-traded fund, the iShares Silver Trust, said its silver holdings stood at 9,339.19 tonnes as of January 14, down 1.6 percent from the previous business day.