Gold retreated on Friday as the rise in equities and the U.S. dollar lowered demand on bullion, yet the metal was still set for a weekly advance after climbing to a 1-1/2-week high on Wednesday,
The precious metal slipped to a low of $1094.98 an ounce, while currently trading around 1095.03, compared to the session’s opening at $1101.18.
Asian shares soared on Friday, trailing gains in European and U.S. stocks on Thursday amid stimulus hopes and recovery in crude prices.
The Shanghai Composite index edged up 1.25 percent, while Japan’s Nikkei 225 index climbed 5.88 percent.
ECB President Mario Draghi hinted on Thursday the central bank will review its monetary policy in March, leaving the door open for a stimulus boost.
The BoJ is “taking a serious look” to expand its stimulus program to push the low inflation to its objective, according to the Nikkei newspaper on Friday.
While gold should benefit from stimulus hopes, it took a hit from the retreat of the euro against the U.S. dollar after Draghi’s comments.
The dollar rose against a basket of major currencies to hover around 99.35, after setting a high of 99.89 the previous session, according to the dollar index.
The rise in the dollar discouraged some demand on bullion as an alternative investment.
On the weekly basis, gold is set for weekly gain as the sharp sell off in equities encouraged some haven demand on bullion.
In the coming weeks, physical demand from China may increase as the Lunar New Year, which starts early February, approaches.
