Gold prices are expected to add to their recent gains next week, respondents to the S&P Global Platts Gold Sentiment Survey said Friday, as the dollar dropped to new lows following disappointing GDP readings for the US economy.
GDP in the world's largest economy climbed at an annualized rate of 2.6% in the second quarter, up from 1.2% in the first quarter, but below expectations of 2.7%, the US Commerce Department said Friday.
Importantly, growth was revised lower for the previous three quarters, while jobs data also showed lower wage growth than expected.
The dollar fell against most currencies as result, down over 0.50% against the euro shortly after the data was issued, to an intraday low of $1.720 and just shy of Wednesday's 2.5-year low of $1.1735.
The dollar has been under pressure this week following Wednesday's Federal Reserve meeting which kept interest rates unchanged as expected, but signaled it would soon begin a planned reduction of its balance sheet.
It helped gold climb around $5 on the day to fresh six-week highs of $1,265/oz at 1400 GMT Friday, up over 1.4% on the week and nearly 3.75% higher in the last two weeks.
Respondents to the Platts survey almost unanimously forecast gold prices higher next week, with an average range of $1,250-$1,280/oz. Last week they correctly forecast prices higher.
The dollar is expected to dominate gold prices again next week, participants said Friday, while attention will also focus on physical demand. According to GFMS Thomson Reuters, global physical gold demand in the first half of 2017 increased by 17% on the year to 1,895 mt.
India also became the world's largest gold consumer this year, overtaking China, as physical demand picked up in the country in the second quarter, ahead of a new Goods and Sales tax implemented in July, the consultancy said Friday.
Indian gold premiums remain flat to the international price this week, unchanged on the previous week.
Premiums are also unchanged in China, at a $10/oz premium this week.
Small premiums were reported in Dubai of around 50 cents/oz, and Turkey at parity.
