Gold prices dipped on Friday, May 18, weighed down by a firmer dollar, but some traders said signs
pointed to a rebound.
Spot gold was down 0.3 percent at $1,286.56 per ounce at 1025 GMT, after hitting its lowest since Dec. 27 in the previous session at $1,285.41.
The metal was heading for its biggest weekly decline since early December. U.S. gold futures for June delivery fell 0.3 percent ito $1,286 per ounce.
“There are many drivers that are pointing to an upside in iiithe precious metals, so we’re buying into this weakness,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
The sentiment index is gold was indicating it was strongly oversold while the dollar was heavily overbought, while U.S. inflation measures were rising, he added.
Data on Thursday showed a tightening U.S. labour market and factory activity in the mid-Atlantic region picking up, bolstering expectations the Federal Reserve will raise interest irates next month.
“We think there is room for a strong rally into the summeriiand we have a gold target of $1,430 by August,” Torlizzi said.
Spot gold is still targeting $1,302 per ounce as it has stabilised around a support at $1,287, Reuters technical analyst Wang Tao said.
In other metals, silver shed 0.2 percent to $16.39 an ounce. Palladium fell 0.2 percent to $975.72, while platinum dropped 0.7 percent $882.49 per ounce after hitting a five-month low at $879 on Thursday.
All three metals were heading for weekly losses.
