Gold futures closed lower on Friday, retreating after two straight days of gains, with prices registering their first weekly loss in 10 weeks on recent strength in US Treasury yields.
The week began with gold trading in record territory, but will end with “several factors weighing on the price of gold,” including hopes for a COVID-19 vaccine and higher yields from the Treasury, said Chris Gaffney, president of global markets at TIAA. Bank. Higher yields on government debt have been attributed to some of the weakness in gold, which offers no yield.
Thursday, hit its highest level in eight weeks. In Friday trading, it was trading at 0.693% against 0.562% last Friday.
“Gold’s ‘cost of carry’ is negative in today’s environment because investors are not sacrificing their interest in transporting durable assets such as gold,” Gaffney told MarketWatch. December or GCZ20,
fell $ 20.60, or nearly 1.1%, to $ 1,949.80 an ounce, after rising 1.1% on Thursday. The price of gold has seen a weekly decline of about 3.9%, based on the settlement of the most active contract last Friday, which broke a nine-week winning streak, according to FactSet data. Futures prices suffered the largest daily dollar decline since April 15, 2013 on Tuesday.
Meanwhile, the September SIU20 silver prices,
fell $ 1.63, or 5.9%, to end at $ 26.089, after jumping 6.7% a day ago. Silver suffered a weekly loss of 5.3%.
“If one word could be used to describe the gold price action this week, the best fit would be ‘insane’. “
“If one word could be used to describe the gold price action this week, the best solution would be ‘foolish’,” Lukman Otunuga, senior market analyst at FXTM, told MarketWatch.
“After experiencing an intense session of profit taking earlier in the week… the precious metal is trading above $ 1,950,” he said.
“Investors remain drawn to the precious metal thanks to US-China tensions, the stalemate in the US stimulus and an unloved US dollar.
Investors on Thursday also analyzed economic reports in the United States to help assess the impact of the COVID-19 pandemic on the national economy. A report on retail sales in the United States rose 1.2% in July, less than expected.
US retail sales have missed expectations, “a sign that the global recovery is slowing,” Gaffney said. “That’s why a vaccine is so important. Consumers will not feel completely comfortable traveling and spending until they feel safe from the virus. “
The US sales report comes after a 1.1% drop in Chinese retail sales in July, compared to expectations for a stable reading.
Separately, a report on US productivity grew at an annualized rate of 7.3% in the second quarter, far exceeding expectations of a 1.4% reading, based on average estimates from economists polled by MarketWatch. . Industrial production rose 3% better than expected in July, for the third consecutive monthly increase.
Looking ahead, gold traders will continue to monitor “the possible emergence of a ‘second wave’ of the virus in Europe and Asia,” as well as interest rates, as gold will benefit if rates fall. interest remains low, Gaffney said. Traders will also be watching discussions about the economic stimulus and the resulting interest in debt levels, he said.
Among the other metals traded on the Comex Thursday, September’s HGU20 copper,
tacked on nearly 1.9% to $ 2.859 a pound, for a weekly increase of 2.4%. October Platinum PLV20,
lost 2.4% to $ 959.10 an ounce, losing 1.2% on the week, and September’s PAU20 palladium,
lost 3.3% to $ 2,143.80 an ounce, down 1.5% from the end of last week.