Gold futures climbed above $1,300 an ounce on Friday, with prices for the yellow metal on track for a weekly gain as the U.S. dollar pulled back and investors eyed geopolitical turmoil and global growth worries.
Rising gold prices reflect “political uncertainty” in the U.S., Eurozone, Venezuela and pockets of South America, as well as China-U.S. trade talks, said George Gero, managing director at RBC Wealth Management, in a note.
Gold for February delivery GCG9, +1.38% on Comex was up $16.80, or 1.3%, to $1,302.70 an ounce after trading as high as $1,304.70. The April contract was up 1.1% for the week and hasn’t settled above $1,300 since Jan. 3. Tracking the most-active contracts, however, prices haven’t settled above that level since June, according to FactSet data.
March silver SIH9, +2.52% rose 36.5 cents, or 2.4%, to $15.665 an ounce—trading up 1.7% for the week.
“The U.S. dollar has weakened again ahead of next week’s FOMC meeting amid growing expectations that the [Federal Reserve] will reiterate the need to pause its [interest-rate] hiking cycle,” said Fawad Razaqzada, market analyst at Forex.com.
The ICE U.S. Dollar Index DXY, -0.69% a measure of the currency against six major rivals, was off 0.7%, trading 0.5% lower for the week. A weaker U.S. unit can be supportive for dollar-priced commodities by making them cheaper to users of other currencies.
“In addition, the yuan has been on the rise on hopes over a resolution in U.S.-China trade dispute. With a stronger renminbi, Chinese consumers can buy more gold than was the case previously,” Razaqzada said.
“The fact that gold has so far refused to go down meaningfully from around the $1,295-$1,300 resistance area suggests that the selling pressure is not that strong” and the metal “looks poised for a potential breakout above this hurdle, which could then lead to further technical follow-up buying pressure early next week,” he said.
Meanwhile, the International Monetary Fund’s cut to its 2019 global growth forecast earlier this week and a round of downbeat Chinese economic data have underpinned gold, often considered a haven asset, said Lukman Otunuga, research analyst at FXTM, in a Friday note.
In other metals trade, March palladium PAH9, +3.12% was up 1.3%, to $1,297.60 an ounce, but looking at a weekly loss of about 2.8% after briefly surpassing the price of gold last week. April platinum PLJ9, +1.76% rose 1.6% to $817.70 an ounce—up 1.9% for the week.
March copper HGH9, +3.03% rose 2.4%, to $2.708 a pound, but looked at a weekly loss of 0.4%.
Among exchange-traded funds, the SDPR Gold Shares GLD, +1.33% added 1%, poised for a weekly rise of 1.1%. The VanEck Vectors Gold Miners ETF GDX, +3.39% rose 2.7%, looking to lift its weekly rise to 3.6%.