Picture: BLOOMBERG/KIYOSHI OTA
Picture: BLOOMBERG/KIYOSHI OTA

MANILA — Gold steadied on Friday after recent gains that lifted the metal to its highest since November, keeping it on track to end January with its strongest monthly climb in a year.

The metal got a strong boost this week after the US Federal Reserve said it was closely watching the global economy and financial markets, supporting the expectation that policy makers may not be able to raise interest rates again as soon as March.

Underpinning that belief, data on Thursday showed new orders for US durable goods posted their biggest drop in 16 months in December, suggesting that growth in the world’s top economy braked sharply at the end of 2015.

A March rate hike was looking "extremely unlikely", CMC Markets chief market strategist Michael McCarthy said in Sydney.

"Now that the Fed has said that they are looking at international conditions and their impact on the US economy it’s quite clear they’d be waiting ... and there are not just enough macro data between now and the March meeting for them to shift from their current position," said Mr McCarthy.

That should support gold in the near term as the dollar came under pressure, he said.

Spot gold was little changed at $1,115.20/oz by 3.16am GMT.

Profit-taking on Thursday caused bullion to retreat from a 12-week high of $1,127.80 reached the previous day. For the month, gold was up 5%, its biggest such gain since January last year.

US gold for February delivery was flat at $1,115.90/oz.

Despite gold’s gains, Barclays is sticking to its price forecast of $1,075 for the first quarter and $1,054 for 2016.

"We think China’s volatility and its implications for the US are the top risks for gold in 2016," the bank said in a report.

Investors are eyeing US fourth-quarter gross domestic product (GDP) due later on Friday. Economists polled by Reuters suggest US GDP growth of 0.80% in October-December and annual expansion of 2.5% in 2016.

Spot silver was up 0.2% at $14.26/oz, well above the official London benchmark price of $13.58 set on Thursday.

The London Bullion Market Association silver price settled more than 80c below the spot price, sparking concern among traders who say it is too easy for the benchmark to deviate from the current spot price.

Spot platinum rose 0.4% to $863.49/oz and palladium gained 0.5% to $491.91.

Reuters