June gold GCM9, +0.10% rose $3, or 0.2%, to $1,296.30 an ounce. The contract finished Thursday at $1,293.30. That was the lowest finish and largest single-session loss for a most-active contract since March 28, according to FactSet data.
A popular gauge of the dollar, the ICE U.S. Dollar Index DXY, -0.22% fell Friday to a two-week low, at risk of snapping its latest winning streak. But stocks on Wall Street were trading with strong gains. Risk-on demand tends to limit buying in precious metals.
Gold prices on Thursday pushed bullion below a psychologically and technically significant level at $1,300, as relatively upbeat U.S. economic data of late makes “a near-term Fed cut that much less likely, [and] reduces the attraction of precious metals,” said Marshall Gittler, chief strategist at ACLS Global.
Thursday’s selloff marked a sharp reversal in momentum in the metal after it finished at $1,313.90 on Wednesday — the highest finish since March 26 and representing its longest win streak, four sessions in a row, since a five-day rise ended Jan. 31. All told, the contract is headed for a slightly positive finish for the week, up less than 0.1%.
A brighter picture for China in data Friday backed the risk-on sentiment that drew investors into stocks and limited demand for haven metals. Exports rose 14.2%from a year earlier in March, against forecasts calling for a rise of 8.7% and after a sharp drop in February. Countering that headline, imports flagged, reflecting softer domestic demand. At the same time, issuance of new bank loans in China came in at 1.7 trillion yuan USDCNY, -0.2262% above consensus expectations of 1.3 trillion yuan expected by economists, according to Econoday, suggesting that efforts by the Chinese government to stimulate credit growth are working.
Longer term, stocks do look vulnerable to a correction that could bode well for gold, said Oliver Allen and the commodities group at Capital Economics, in an outlook. He pegged the price of gold to rally from around $1,300 per ounce at present to $1,400 by end-2019.
That said, the firm’s prediction is for a slowdown rather than an outright recession for the U.S. As such, the S&P 500 starts to recover by end-2020. “On past form, that would point to gold giving up some of its earlier gains. As such, we forecast that the gold price to slip back to $1,350 per ounce by end-2020, and $1,250 by end-2021,” Allen said.
Meanwhile, May silver SIK9, +0.59% rose 14.3 cents, or 1%, to $15.01 an ounce. It’s on track to end the week down 0.5%.
May copper HGK9, +1.94% was up 1.9% at $2.941 a pound, with prices up 1.6% on the week. July platinum PLN9, +0.27% rose 0.6% to $901.40 an ounce, trading down 0.4% from a week ago, while June palladium PAM9, +1.14% rose 1.2% to $1,348.10 an ounce, on track for a weekly rise of 0.2%.
The SPDR Gold Shares (GLD) was trading at $121.94 per share on Friday afternoon, down $0.01 (-0.01%). Year-to-date, GLD has declined -1.38%, versus a 9.13% rise in the benchmark S&P 500 index during the same period.
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