Gold futures finished higher on Friday, contributing to a gain for the week, as some traders expect the Federal Reserve to be “less aggressive” on interest-rate hikes, but prices for the precious metal still post a loss for the month.
Price action
-
The most-active December gold
GC00,
+0.76% GCZ22,
+0.76%
contract gained $12.60, or 0.7%, to settle at $1,781.80 an ounce on Comex. Based on the most-active contract, gold gained nearly 3.2% for the week, but lost 1.4% for the month, according to Dow Jones Market Data. -
Silver
SI00,
+2.35% SIU22,
+2.35%
for September delivery climbed 33 cents, or 1.7%, to $20.197 an ounce, extending a rally from Thursday, when prices jumped by 6.8%. Silver rose 8.5% for the week, but posted a monthly loss of 0.8%. -
Palladium
PAU22,
+2.08%
for September delivery added $49.50, or 2.4%, to $2,129.70 an ounce, ending the month over 11% higher. Platinum
PLV22,
+1.56%
for October delivery rose $13, or 1.5%, to $889.80 per ounce, ending the month with a loss of 0.6%. -
Copper
HGU22,
+3.45%
for September delivery gained 10 cents, or nearly 2.9%, to settle Friday at $3.5735 — down 3.7% for the month.
What analysts said
In July, gold bulls were “terrorized by expectations of very aggressive interest-rate hikes by the Federal Reserve, and almost all central banks,” which led to a historical high in the U.S. dollar index and rising bond yields, Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. Gold logged a loss for the month.
However, the price of the most-active gold contract has gained roughly $40 since Federal Reserve Chairman Jerome Powell spoke on Wednesday, Rupert Rowling, a market analyst at Kinesis, noted. He added that gold has benefited from the market’s interpretation that the Fed might not be as aggressive with its interest-rate hikes going forward.
Read: What’s in store for commodities after losses in July?
Also see: Why Goldman’s commodity guru Jeff Currie is bullish on oil despite July’s pullback
Signs that the Fed “may be less aggressive with its future interest rate hikes have allowed the precious metal to recover some of the month’s losses,” Rowling wrote in an email. Gold finished higher for the week.
Gold’s rise on Friday came on the back of weakness in the U.S. dollar, with the ICE U.S. Dollar index
DXY,
down 0.2% at 106.168 in Friday dealings, as well as a fall in U.S. Treasury yields, with the yield on 10-year Treasurys
TMUBMUSD10Y,
down 3.9 points at 2.638%.
Meanwhile, Karnani thinks gold would climb back to the $2,000 level only if the U.S. dollar index sinks and U.S. interest rates hikes “top out” by the November Federal Open Market Committee meeting.