Gold Price Eases, Set For Third Weekly Loss As Risk Appetite Grows

Gold fell and was on track for a third straight weekly decline on Friday, weighed down by gains in riskier assets as investors grew more hopeful of a rebound in the coronavirus-hit global economy.

Spot gold was down 0.3 per cent at $1,705.73 per ounce at 5:10 pm. US gold futures fell 1.2 per cent to $1,707.30 per ounce.

Bullion has declined 1.2 per cent so far this week, on track for its biggest fall since the week ending May 1.

"The European Central Bank's move yesterday is supporting risk-taking .... It seems more investors holding gold are switching out to the equity market," said UBS analyst Giovanni Staunovo.

"I still see gold moving in a $1,700-$1,750 range for the time being."

The ECB approved a bigger-than-expected expansion of its stimulus package on Thursday, which added to investors confidence to buy riskier assets. World stocks held their ground near three-month highs.

Investors are now awaiting US nonfarm payrolls data for May at 6:00 pm. Payrolls are seen falling by 8 million after a record 20.537 million plunge in April, according to a survey by news agency Reuters.

The data comes ahead of a two-day policy meeting of the Federal Reserve next week. The US central bank has injected massive stimulus and cut interest rates to near zero to cushion the blow from the coronavirus pandemic.

The unprecedented central bank stimulus to bolster economies has also boosted risk appetite, curbing some demand for safe-haven assets.

"Gold prices have levelled-off in the past few weeks ... We see $1,670 per ounce as the key support and $1,750 as key resistance, (a) break on either side will provide a clear guidance," said ANZ commodity strategist Soni Kumari.

Elsewhere, palladium edged 0.1 per cent higher to $1,933.70 per ounce, while platinum dropped 0.8 per cet to $830.18. Silver was 0.6 per cent lower at $17.61, and was set for its first weekly decline in five.