Gold futures took a small gain on Friday to stop a third consecutive slide, but the advance of the precious metal for the day was not enough to prevent the first back-to-back weekly declines since the COVID-19 pandemic began in March .
Experts say a resurgence in US dollar investors gave some pause in buying bullion because the goods are in currency prices and a stronger dollar gold can make comparatively more expensive for foreign investors.
The dollar was up 0.5% on Friday, pushing for a sharper rise earlier in the session, but also putting a measure of the dollar against a half-dozen currencies, the ICE Dollar Index, heading for a weekly rise of 0, 2%, in part prompted by comments from the Federal Reserve implying that the central bank is not yet ready to implement unconventional strategies to keep interest rates lower for longer amid the COVID-19 pandemic.
“Golden bulls have been in action this week as investors chased down the last Fed minutes that temporarily inject life into the dollar,” Lukman Otunuga, senior research analyst at FXTM, wrote in a Friday note.
However, FXTM analysts see the long-term outlook for the yellow metal as strong.
“Regardless of recent losses, the foundations remain in favor of higher gold prices with a rebound potential on the cards,” Otunuga wrote. He said that weakness in government debt rates, with the 10-year Treasury note yield TMUBMUSD10Y,
trading between 0.80% and 0.60% in recent weeks, concerns about the outcome of the US presidential election and the path to the economy in the wake of the race for the White House as bullish factors for bullion.
“A broad weaker dollar, negative U.S. earnings, election jitters, and emerging cases of coronavirus in the United States are likely to hold gold in the medium to long term,” he said.
In addition, analysts at UBS said that gold could serve a place in a diversified portfolio “as a way to capture economic recovery,” and “a portfolio hedge in a low-rate environment.”
Meanwhile, on Thursday, former Vice President Joe Biden once accepted the Democratic presidential nomination and cast himself as a capable leader ready to steer the nation out of the corandavirus pandemic, setting the stage in November for a battle with Republican local president Donald Trump.
December gold GCZ20,
GC00,
picked up 50 cents, or less than 0.1%, to settle at $ 1,947 per ounce, marking a weekly decline of 0.1%, based on last Friday’s settlement for the most active contract. The decline marks the second straight weekly decline in gold since a similar stretch ended March 20, according to FactSet data.
Meanwhile, December silver prices are SIU20,
the most active contract, fell 42.4 cents, or 1.5%, to end at $ 26,877 an ounce, with the metal achieving a weekly decline of 3%, based on the most active contract.
In other metals, September copper HGU20,
declined 5.7 cents, or 1.9%, to settle at $ 2.9175 per pound, but marked a weekly gain of 2%. Separate, October platinum PLV20,
threw 80 cents, or less than 0.1%, to end at $ 926.10 per ounce, and recorded a 3.4% weekly decline, while September palladium PAU20,
declined $ 6.60, or 0.3%, to settle at $ 2,180.30 per ounce, but marked a weekly climb of 1.7%.
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