Gold futures edged higher on Friday after a three-session decline attributed in part to strength in the U.S. dollar, pulled prices for the precious metal to their lowest in more than seven weeks.
For the week, gold prices were on track to notch a loss of nearly 3%, which would be the largest weekly loss since October.
Price action
-
Gold futures for June delivery
GC00,
+1.03% GCM23,
+1.03%
gained $2.60, or 0.1%, to $1,962.40 per ounce on Comex, with prices for the most-active contract down about 2.8% for the week. -
Silver futures for July delivery
SI00,
+1.79% SIN23,
+1.79%
rose by 18.2 cents, or 0.8%, to $23.815 per ounce, eying a weekly loss of more than 1%. -
June Palladium
PAM23,
+4.81%
gained $66.30, or 4.6%, to $1,516.50 per ounce, while platinum for July delivery
PLN23,
+1.66%
rose by $12.10, or 1.1%, to $1,070.30 per ounce. -
Copper for July delivery
HGN23,
+1.11%
advanced by 5.1 cents, or 1.4%, to $3.74 per pound.
Market drivers
“Sellers wasted no time at all jumping into action and pricing in fast declines into gold after it unexpectedly dropped below $2,000 this week,” Jameel Ahmad, chief analyst at CompareBroker.io, in market commentary.
The U.S. dollar has strengthened for the week, along with higher Treasury yields, has taken the shine off gold in recent days, but a pullback in the greenback on Friday has given gold a chance to recoup some losses.
The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s strength against major currencies, was off 0.2% at 103.35 in Friday dealings, though still poised for a weekly gain of 0.6%.
Read: Gold’s drop under $2,000 is a buying opportunity, say UBS and other analysts
Short sellers came back once gold traded below $2,000, said Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. A selloff in gold “accelerated this week once the U.S. dollar Index broke past [its] 50-day moving average and 100-day moving average, he said, with the technical breakout in the dollar leading to a “technical breakdown in gold.”
Whether gold continues to decline in the short term depends on the trend of the U.S. dollar index, the metal’s inability or ability to trade over its 100-day moving average around $1,927, U.S. nonfarm payrolls numbers on June 2, and physical and investment demand for gold, said Karnani.
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