Metals Stocks: Gold tallies a third straight weekly decline on overall strength in the U.S. dollar


Gold prices edged higher on Friday after the most-active contract settled at its lowest level in about nine weeks a day earlier.

Expectations that a deal on the U.S. debt-ceiling could be reached in the coming days are helping to support the yellow metal, analysts said, by causing the dollar to soften.

Price action

  • Gold futures for June delivery GC00, +0.10% GCM23, +0.10% gained $4.40, or 0.2%, to $1,948.10 per ounce on Comex, with prices for the most-active contract down about 1.7% for the week, FactSet data show.
  • Silver futures for July delivery SI00, +2.18% SIN23, +2.18% gained 35.5 cents, or 1.6%, to $23.265 per ounce, poised for a weekly loss of more than 3%.
  • Palladium for September delivery  PAU23, +0.69%, which is now the most-active contract, gained $23.80, or 1.7%, to $1,442 per ounce, while platinum for July delivery PLN23, +0.25% rose by $7.90, or 0.8%, to $1,034.20 per ounce.
  • Copper for July delivery HGN23, +2.33% gained 7.7 cents, or 2.1%, to $3.6645 per pound.

Market drivers

Precious metals analysts are questioning whether gold’s pullback from its multiyear highs reached in early May is a sign of further declines to come, or just a short-lived pause before the yellow metal trudges higher.

“Yet while gold is undoubtedly trending downward currently, it is worth remembering that $1,950 an ounce remains a very high level historically for the precious metal and it is still trading well over $100 an ounce higher than where it was at the start of the year,” said Rupert Rowling, a market analyst for Kinesis Money, in emailed commentary.

Gold has lagged behind as the U.S. dollar has moved higher. A stronger dollar makes gold less affordable for buyers using foreign currencies.

The ICE U.S. Dollar Index DXY, -0.03%, a gauge of the buck’s value against its main rivals, was off 0.1% at 104.13 in Friday dealings, but trading 0.9% higher for the week.

Gold has “succumbed to another round of U.S. dollar buying,” said Tim Waterer, chief market analyst at KCM Trade, with the greenback “going form strength to strength in recent weeks” against a backdrop of Federal Reserve “rhetoric” and solid economic data forcing the market to scale back future interest-rate cut expectations.

With the dollar attracting “solid buying flows, gold looks vulnerable near term, unless something changes to take the wind out of the sales” of the dollar, said Waterer, in market commentary.

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