Gold prices inched higher Friday but gains were capped by a rise in bonds yields and stocks. However, bullion’s trade over the past five sessions puts it on pace to break out of a weekly skid of three consecutive weekly losses.
Gold for December delivery GCZ19, +0.11% on Comex was up 80 cents, or less than 0.1%, at $1,507 an ounce, after retreating 0.6% on Thursday. For the week, the yellow metal is on track for a 0.5% gain based on last Friday’s closing price, which would halt three consecutive weekly declines, bringing the metal back above a psychologically significant level above $1,500.
December silver SIZ19, +0.01% edged 2 cents, or 0.1%, lower to $17.865 an ounce, with the white metal on pace for a weekly gain of 1.8%.
Precious metals have benefited from the accommodative policy from the world’s central banks, which has come amid signs of economic weakness in the U.S. and the rest of the world. Conflicts in the Middle East, with an attack on Saudi Arabia’s oil-processing complex, also has helped to bolster gold prices.
Some evidence of more upbeat data in the U.S. on Thursday, however, helped to nudge down demand for haven assets, but investors will watch for comments from U.S. central bankers during Friday’s session for further guidance on the outlook for monetary policy. On Wednesday, the Fed cut its target federal-funds rate by a quarter percentage point to a 1.75%-2% range, as expected, but did not reveal a coordinated commitment to further accommodation.
St. Louis Fed President James Bullard on Friday explained in a statement on the regional central bank’s website why he advocated for a more aggressive half percentage point cut to rates on Wednesday, citing a slowdown on the U.S. economy that was on the horizon and manufacturing that he described as already in recession.
Meanwhile, New York Fed President John Williams was set to deliver a speech and Boston Fed President Eric Rosengren, who voted to keep rates on hold, was slated to speak on Friday. Fed Vice Chairman Richard Clarida is expected to appear on CNBC at 10 a.m.
Meanwhile, government bond yields were edging up along with futures for the main U.S. stock-market indexes, reflecting some tepid appetite for assets perceived as risky.
Stephen Innes, an independent strategist, said on Friday that gold may attract some buyers as investors attempt to brace for any surprise events, like the attack that played out last Saturday.
“At this level of conflict, weekend headline risk needs to be respected, and a bit of gold coverage could put weekend risk matter to ease,” Innes wrote.
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