India Markets open in 6 hrs 5 mins

Gold eyes second weekly gain as focus shifts to growth fears

FILE PHOTO: An employee of the ProAurum gold house decorates, what they say is Europe's most expensive Christmas tree, made of 2.018 Vienna philharmonic gold coins, valued at 2.3 million euros in Munich, Germany December 3, 2018. REUTERS/Michael Dalder

(Reuters) - Gold rose on Friday enroute to a second weekly gain as the dollar was subdued by weak U.S. economic data and hopes of a breakthrough in the U.S.-China trade dispute, with a darkening global economic outlook bolstering bullion.

Spot gold was up 0.3 percent at $1,327.40 per ounce by 2014 GMT, or about 0.5 percent higher so far this week.

U.S. gold futures settled down 0.4 percent at $1,332.80 per ounce.

The metal had fallen about 1 percent on Thursday following the release of minutes from the U.S. Federal Reserve's last policy meeting, which painted a less dovish picture than expected.

"Gold should be doing a little better, because there are possibilities of a trade deal, which would mean the dollar could weaken; the U.S. economy is also slowing quite markedly, that should keep interest rates fairly dormant," INTL FCStone analyst Edward Meir said.

Higher rates reduce investor interest in non-yielding bullion.

The dollar index was little changed versus six other major currencies on Friday, but was set for its biggest weekly fall in a month, bolstering the appeal of gold.

The U.S. currency, which has been a refuge for investors during the U.S.-China trade dispute, has come under pressure on signs of a breakthrough in talks. [USD/]

Also helping the case for gold, new orders for U.S.-made capital goods unexpectedly fell in December, reviving hope that the Fed would halt its 2019 rate-increase cycle.

The news added to concerns about a slowdown in Europe and China, which analysts said have prompted increasing interest in gold, considered a safe haven in times of economic and political uncertainty.

However, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.6 percent to 789.51 tonnes on Thursday.

Natixis analyst Bernard Dahdah said the slight pullback did not signal a shift by gold investors since the levels were still close to highs recorded at the start of 2019.

Elsewhere, palladium gained 1.6 percent to $1,492.50 per ounce.

The autocatalyst metal was on track for a third straight week of gains, up about 4.3 percent.

Platinum rose 2.5 percent to $839.50, and was set for its best week since early November 2018. Silver was up 0.6 percent to $15.91, and poised to snap two weekly losses.


(GRAPHIC-Spot gold and ETF holdings, click here https://tmsnrt.rs/2BOiInZ)


(Reporting by Arijit Bose and Harshith Aranya; Editing by Richard Chang)