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Gold struggled to recover from a two-week low on Thursday as a robust dollar and the prospects of higher US interest rates dented the demand for the metal.
Spot gold was little changed at $1,187.05 an ounce by 0332 GMT. The metal had hit a two-week low of $1,183.76 in the previous session, but pared losses to end flat for the day. Silver was also near its lowest since May 13 of $16.55 an ounce.
“Gold and silver flounder against a backdrop of no major data releases to give price guidance and sluggish physical demand,’’ HSBC analyst James Steel said.
US economic data
There has been no major US data release since Tuesday data showing strong core business spending, new home sales and consumer confidence.
Gold fell 1.7 per cent on Tuesday, its sharpest one-day drop since April, as investors believed the robust data would prompt the Federal Reserve to soon raise interest rates.
Dollar vs other currencies
The dollar will be an important factor in gold’s near-term direction, Steel said, adding that $1,180 was the next big support level for bullion.
The greenback was trading near a one-month high against a basket of major currencies, and hit a 13-year high against the yen on Thursday.
The dollar has been well-bid since Fed Chair Janet Yellen had said last week that the US central bank is poised to raise interest rates later this year.
Jobless claims, home sales data
Data on US weekly jobless claims and pending home sales due later on Thursday will be eyed for trading cues.
Investors believe higher rates would dent the gold’s appeal as it is a non-interest-paying asset. Robust data and a higher greenback diminish the demand for gold as a safe haven.
Greek debt crisis
Traders were also eyeing the Greek debt crisis, worsening of which could trigger safe-haven demand for gold.
Greece and its international creditors have converged on key points on a cash-for-reforms deal but talks still have some room to cover before an agreement is clinched, the country’s economy minister said on Thursday.
In the physical markets, buying did not pick up significantly this week despite the sharp slide in prices, bullion dealers said.
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