Gold futures ended slightly higher on Friday, with gains capped at the dollar continued to strengthen against a select band of currencies. With most global equity markets on the up, demand for the safe haven metal remained tepid.
With little or no major economic releases for the day, gold futures took cues from the rising global equity markets, boosted by the Fed's assurance that it would be patient with regard to interest rate hikes.
Gold for February delivery, the most actively traded contract, inched up $1.2 or 0.1 percent, to settle at $1,196.00 an ounce on the Comex division of the New York Mercantile Exchange on Friday.
Gold for February delivery scaled an intraday high of $1,201.50 and a low of $1,193.20 an ounce.
On Thursday, gold futures ended a tad higher at $1,194.80 an ounce, up $0.30, on strong global equity markets and a firm dollar on the back of an upbeat jobs data from the U.S.
The Federal Reserve's statement Wednesday that it would remain ‘patient' before hiking interest rates lifted gold early on. Data from the Federal Reserve Bank of Philadelphia showing a slower pace of growth in regional manufacturing activity also supported the yellow metal.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 721.56 tons on Friday, from its previous close on Thursday.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 89.61 on Friday, up from its previous close of 89.24 late Thursday in North American trade. The dollar scaled a high of 89.65 intraday and a low of 89.18.
The euro trended lower against the dollar at $1.2228 on Friday, as compared to its previous close of $1.2285 late Thursday in North American trade. The euro scaled a high of $1.2306 intraday and a low of $1.2225.
In economic news, a report from the European Central Bank said the eurozone current account surplus declined notably in October, falling to a seasonally adjusted EUR 20.5 billion from EUR 32 billion in September.
German consumer confidence is set to improve to an eight-year high at the start of the year on strong gains in economic expectations and willingness-to-buy as the current economic weakness is viewed to be temporary, the market research group GfK said Friday. The forward-looking consumer confidence index climbed to 9 for January, the highest since December 2006, from 8.7 in December. The index was forecast to rise marginally to 8.8 points.
Elsewhere in Europe, the U.K. budget deficit narrowed in November, yet a considerable improvement is required to meet the government's fiscal target for 2014/15. Public sector net borrowing, excluding interventions, declined by GBP 1.6 billion from last year to GBP 14.1 billion in November, the Office for National Statistics reported Friday. Economists had forecast a shortfall of GBP 15.1 billion.
From Asia, the Bank of Japan left its monetary stimulus unchanged in order to assess the impact of its past massive easing. The unchanged stance came despite falling oil prices posing a threat to the central bank's 2 percent inflation target.
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