By A. Ananthalakshmi
SINGAPORE (Reuters) – Gold struggled below $1,300 an ounce on Friday as U.S. jobs and factory data indicated brighter prospects for the economy, hurting the metal’s appeal as an investment hedge.
Platinum was headed for its best weekly gain in three months on supply worries from prolonged strikes in top producer South Africa, while palladium was also poised for a weekly jump.
New applications for U.S. unemployment benefits hit a seven-year low last week while consumer prices recorded their largest increase in 10 months in April. Factory activity in New York state expanded at its quickest pace in nearly four years in May.
Spot gold eased 0.1 percent to $1,294.20 an ounce by 0648 GMT, after dropping 0.7 percent on Thursday.
“Despite Thursday’s modest sell-off in gold, we remain constructive on the precious metal short term, as there are too many geopolitical hot spots that still have the capacity to flare up rather unexpectedly,” INTL FCStone said in a note.
The metal is still up 0.6 percent for the week on earlier gains from political uncertainty in Ukraine, which has increased tensions between Russia and the West.
Gold is often seen as a safe-haven investment compared with riskier assets such as equities.
Investor interest perked up with SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, showing a modest increase in flows. Holdings in the fund rose 1.79 tonnes to 782.25 tonnes on Thursday – the first inflow in a month. [GOL/ETF]
U.S. data also showed that hedge fund Paulson & Co in Q1 maintained its stake in SPDR as bullion prices rebounded from their biggest annual loss in 32 years in 2013, while PIMCO dissolved its gold ETF investment.
In news among other precious metals, platinum producer Lonmin said on Thursday it might go to court in a bid to stop a 16-week strike in the platinum belt because of the levels of violence faced by workers who want to return to work.
The current stoppage has hit about 40 percent of global production of the precious metal used for emissions-capping catalytic converters in automobiles, with about 880,000 ounces lost to date, according to Reuters’ calculations.
Platinum was headed for a 3 percent weekly jump, while palladium was up nearly 2 percent.
