Gold tapped the $1,400-an-ounce level for the first time since 2013 on Friday, as investors continued to bet on easier monetary policy from the Federal Reserve and other central banks. But then the metal started backtracking.
August gold GCQ19, -0.63% GCQ19, -0.63% rose as high as $1,415.40 an ounce, earlier on Friday, but then began backing away. The metal last traded down $9.20, or 0.7%, to $1,387.40 an ounce. On Thursday, the contract soared $48.10, or 3.6%, to settle at $1,396.90 an ounce, its highest finish since September 2013 based on most-active contracts.
It was also the biggest one-day dollar and percentage gain since June 2016, according Dow Jones Market Data.
And with the week nearly over, gold stands to gain 3.2%.
July silver SIN19, -1.92% fell 2% to $15.180 an ounce, after seeing its highest finish since late March on Thursday.
Gold’s gains came on the heels of a Federal Reserve meeting on Wednesday, in which the central bank held benchmark interest rates steady but spoke of “uncertainties” over the U.S. economic outlook. But the message to markets from the central bank’s projections of future interest rate moves, known as the “dot plot”, and comments by Fed Chairman Jerome Powell was that monetary policy easing was likely.
Precious metals like gold tend to attract buyers in a low interest-rate climate. The week’s gains have come as other central banks have also hinted at easing rates.
“The rally in gold does feel a bit stretched. However, the fact we’ve moved beyond the recent range highs at $1,375 could be significant,” Michael Hewson, chief market analyst at CMC Markets, told MarketWatch.
“For me, if we hold above these breakout levels and hold above $1,400 then we could well see a retest of the August 2013 highs at $1.434. That is my next key level,” he said.
On Tuesday, European Central Bank President Mario Draghi indicated the ECB could introduce more stimulus if the eurozone economy weakens further, while the Bank of England’s Monetary Policy Committee also signaled a readiness to increase stimulus on Thursday.
In other metals dealings, July copper HGN19, -0.55% held steady at $2.710 a pound.
July platinum PLN19, -0.31% rose 0.6% to $810.60 an ounce and September palladium PAU19, -0.85% lifted 0.1% to $1,482.40 an ounce.
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