Gold falls B50 but poised to show weekly gain

Gold prices fell 50 baht at its opening in Bangkok on Saturday.

The Gold Traders Association announced the buying price at 18,750 baht and the selling price at 18,850 baht per baht-weight for gold bars.

For ornaments, the buying and selling prices were 18,480.04 baht and 19,250 baht per baht-weight respectively.

The prices were unchanged on Friday from Thursday, when they had been adjusted three times for a total loss of 50 baht from the previous day.

In world markets, Bloomberg reported from Melbourne gold headed for the first weekly climb in a month as the International Monetary Fund’s decision to walk out of talks with Greece on financial aid outweighed the outlook for higher US interest rates.

Bullion for immediate delivery traded at $1,182.22 an ounce by 2.20pm in Singapore from $1,182.01 on Thursday, when prices fell 0.3%, according to Bloomberg generic pricing. The metal is set to advance 0.9% this week, the first weekly gain since the period ended May 15. Gold in Shanghai was little changed, set for a weekly increase.

The IMF said its team flew out of Brussels after failing to make progress on a debt deal needed to help Greece avoid default. European Union president Donald Tusk abandoned his neutral position as a broker of EU compromises, telling Greece’s Prime Minister Alexis Tsipras to stop maneouvering and decide whether to accept the conditions on financial aid. The standoff has fuelled concern that Greece will exit the euro area, boosting bullion’s appeal has a haven.

“Gold managed to pare some losses aided by renewed investor concern over the Greek debt talks,” James Steel, an analyst at HSBC Securities (USA) Inc, wrote in a note. “Gold has only been mildly supported by the ongoing Greek saga. But were the situation to turn more uncertain and the possibility of default appear more likely, gold could be a beneficiary.”

Gold has dropped almost 10% from this year’s peak in January amid speculation the US Federal Reserve will raise borrowing costs for the first time since 2006 as the economy improves. Higher rates drive investors to favour assets that pay interest, curbing the allure of the metal.

US dollar

Fed officials next meet June 16-17. Reports on Thursday showed retail sales in increased 1.2% last month and jobless claims held below 300,000 for a 14th straight week. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, advanced for a second day on Friday and has climbed 16% in the past year.

“The gold market does not think a rate hike may materialise next week,” Howie Lee, an investment analyst at Phillip Futures Pte in Singapore, wrote in a note. “This is in sharp contrast with the dollar market, which has been slowly inching higher.”

Gold for August delivery rose 0.1% to $1,181.10 an ounce on the Comex, climbing 1.1% this week. Bullion of 99.99% purity was at 236.39 yuan a gram ($1,184.75 an ounce) on the Shanghai Gold Exchange, poised for a 0.6% weekly increase.