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Metals Stocks: Gold prices end slightly higher, second weekly climb in a row

Gold futures gave up most of their gains on Friday, but held above the $1,500 price to score a second weekly climb in a row. Read More...

Gold futures gave up most of their gains for the day by the settlement on Friday, but held ground above the key $1,500 price to score a second weekly climb in a row.

Downbeat economic data, with a reading on U.S. consumer sentiment revised down to 95.5 in October from an initial 96, along with expectations for more easing from global central banks that could add further support for bullion, provided support for gold.

However, news on Friday that the U.S. and China have made progress in trade talks and are close to finalizing parts of a phase one deal dulled some of that haven demand for the yellow metal.

Prices pared “intraday gains on perceived progress of U.S.-China trade deal,” but the consumer sentiment reading “was not good at all,” said Jeff Wright, executive vice president of GoldMining Inc.

December gold GCZ19, +0.19% on Comex rose 60 cents, or 0.04%, to settle at $1,505.30 an ounce after trading as high as $1,520.90 during the session. The most-active contract marked its highest finish since Oct. 9 according to FactSet data.

For the week, the yellow metal rose about 0.8%, marking a second straight weekly rise.

Silver for December delivery SIZ19, +1.30%, meanwhile, added 12.2 cents, or 0.7%, to settle at $17.926 an ounce, with prices logging their highest close since Sept. 25. The white metal saw a weekly gain of 2%.

“Silver could touch $20 with a real U.S.-China deal in place as industrial demand could pick up,” Wright told MarketWatch.

Read: Silver’s risk-to-reward appeal among ‘best opportunities in a decade’

Investors await the Federal Reserve’s policy decision at a two-day gathering on Oct. 29-30, with traders expecting the U.S. central bank to deliver its third quarter percentage point interest cut of the year. However, it isn’t clear if the Fed will conform to high market hopes and ease policy further.

A 25 basis-point cut is priced into gold, said Wright. Movement for the metal will be on the statement that follows the announcement, and whether it offers any hint on a December rate cut or a wait and see stance, he said.

“I am leaning now towards wait and see, but do believe $1,475 [to] $1,525 is good range for gold in foreseeable future,” said Wright. “Too many balls in air for gold to dramatically sell off with Brexit drama, US-China Trade [and the] Middle East.”

Uncertainty surrounding Brexit has added some support for precious metals. U.K. Prime Minister Boris Johnson said he would seek a general election in Dec. 12 to break a Brexit deadlock, but it is uncertain if he can win Parliament’s support for the vote, which could raise the chances of a disorderly exit from Europe’s trade bloc.

For gold, “the recent rebound was also important from a technical point of view, as this recovery is breaking up the negative trendline of the past few weeks. The key level of $1,500 is now a support, while the first resistance level is placed at $1,520,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a Friday note.

Seasonal factors also have been cited as a boost for gold, with commodity experts saying that the India holiday of Diwali, where gold buying tends to increase, could deliver a fillip to futures.

“Gold recovered to $1,500 just in time for the long weekend of Diwali celebrations,” he wrote.

Rounding out trading in other Comex metals, December copper HGZ19, +0.52%  added 0.3% to $2.6755 a pound, with prices up 1.5% for the week.

January platinum PLF20, +0.90%  finished at $933.30 an ounce, up 0.9% for the session, for a weekly rise of 4.2%. December palladium PAZ19, -0.10%  fell by 0.2% to $1,744.20 an ounce, paring its weekly rise to 1.6%.

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