Gold heads for 4th weekly loss in five, platinum hits 5-year low

Gold was poised for a fourth weekly loss in five on Friday, hurt by the strength of the dollar in recent weeks, while platinum slumped to a five-year low.

All eyes are now on U.S. nonfarm payrolls later in the day for more clues about the strength of the U.S. economy, and the impact of the data on monetary policy and the dollar.

Markets believe robust U.S. economic data could prompt the U.S. Federal Reserve to raise interest rates sooner and faster than expected. That would hurt gold and other non-interest-bearing assets.

Higher rates could boost the dollar, which also tends to depress dollar-denominated gold since it makes bullion more expensive for holders of other currencies.

“Platinum group metals (PGMs) continue to be subject to investor liquidation, which is more than offsetting physical interest,” HSBC analyst James Steel said.

“Bargain-hunting may emerge if the platinum-gold spread contracts further.”

The spread was around $30 an ounce on Friday, much lower than the $130 seen at the beginning of September.

“The technical momentum (for platinum and palladium) is lower and we believe the fundamental argument, while sound in the long term, will not necessarily bring buyers in immediately,” Steel said.

Platinum, the biggest loser among precious metals on Friday, tumbled nearly 2 percent to $1,237.40 an ounce, its lowest since September 2009, before recovering modestly to trade at $1,243.48 by 0632 GMT. Palladium also slid.

Silver, platinum and palladium are all headed for their fifth weekly decline in a row Meanwhile, spot gold slipped 0.2 percent to $1,211.30.

The metal has fallen 0.5 percent this week, hurt by a combination of strong U.S. data and the dollar.

With top buyer China away on a week-long holiday, gold is not getting much help from the physical markets, either.

Pro-democracy rallies in Hong Kong provided some support to gold this week, helping it recover from a nine-month low, but not enough to reverse all the losses from a stronger dollar.

SPDR Gold Trust, the top gold-backed exchange-traded fund and a good proxy for investor sentiment, said its holdings fell 1.19 tonnes on Thursday to 767.47 tonnes, the lowest since December 2008.