BENGALURU, Oct 13 (Reuters): Gold prices eased on Friday, a day after they registered their biggest daily gain in more than two years, as the U.S. dollar climbed and global stocks rebounded following a six-day rout.
Spot gold was down 0.3 per cent at $1,219.78 an ounce by 12:43 p.m. EDT (1643 GMT), having jumped about 2.5 per cent in the previous session as an equities selloff steered investors towards the safe-haven asset.
Thursday's peak of $1,226.27 was the highest since July 31. Spot gold has risen about 1.4 percent this week, on track for its biggest weekly gain in seven weeks.
US gold futures were down 0.4 per cent at $1,223.30 an ounce.
"A rally in the US dollar is putting downward pressure on gold today," said Alex Turro, market strategist at RJO Futures.
The dollar index rose as global equities rebounded and on strong Chinese export data.
"Event-driven rallies usually don't last long," said George Gero, managing director at RBC Wealth Management, adding that a rebound in equities was one of the main factors weighing on gold.
"We need more (ammunition) for gold to move further as it has been very well abandoned with only a few central banks buying besides some retail buyers."
Despite gold's sharpest one-day percentage gain since June 2016 on Thursday, the precious metal is still down about more than 10 percent from its April peak, with investors buying dollars as the US-China trade war unfolds against a backdrop of rising US interest rates.
The Fed increased rates last month for the third time this year and is widely expected to raise them again in December.
"Gold is going to be dictated by the US Federal Reserve. As long as interest rates continue to move higher, it's going to continue to apply a lot of downward pressure on the precious complex," RJO Futures' Turro said.
Thursday's surge helped bullion break above the narrow trading range it has been stuck in for the past 1-1/2 months.
"Gold is trading fairly close to the 100-day moving average at $1,228. There should be plenty of resistance, but a close above that level could signal a move higher," MKS PAMP Group traders said in a note.
In other precious metals, palladium fell 1.0 per cent to $1,066.80. The metal rose to its highest since Jan 26. At $1,096.80 in the previous session.
Silver was up 0.1 per cent to $14.58 and platinum was down 0.3 per cent at $836.80, hovering below the previous session's more than two-month high of $843.90.
Meanwhile, gold futures on the COMEX division of the New York Mercantile Exchange ended lower on Friday, as the US dollar regained its strength and US stocks moved up in the wake of a two-day downturn that drove investors to the perceived safety of the precious metal.
The most active gold contract for December delivery fell 5.6 US dollars, or 0.46 per cent, to close at 1,222 dollars per ounce.
The US dollar index, which measures the buck against six rivals, went up 0.21 per cent to 95.24 as of 1910 GMT.
Gold usually moves in opposite directions with the US dollar, which means if the dollar goes strong, gold futures will fall as gold, priced in US dollar, becomes expensive for investors using other currencies.
As for other precious metals, silver for December delivery went up 2.9 cents, or 0.2 per cent, to settle at 14.635 dollars per ounce. Platinum for 2019 January fell 6.6 dollars, or 0.78 per cent, to close at 840 dollars per ounce.
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