Metals Stocks: Gold tallies a third straight weekly decline on overall strength in the U.S. dollar

United States

Gold prices finished higher on Friday, after the most-active contract settled at its lowest level in about nine weeks a day earlier, but still tally a third-straight weekly loss.

Investors weighed prospects for a deal on the U.S. debt-ceiling in the coming days and also eyed strength in the U.S. dollar to gauge haven demand for gold.

Price action

  • Gold futures for June delivery GC00, +0.05% GCM23, +0.05% edged up by 60 cents, or less than 0.1%, to settle at $ 1,944.30 per ounce on Comex, with prices for the most-active contract down 1.9% for the week, according to Dow Jones Market Data.
  • Silver futures for July delivery SI00, +2.25% SIN23, +2.25% gained 45 cents, or 2%, to $ 23.36 per ounce, for a weekly loss of 2.9%.
  • Palladium for September delivery  PAU23, +0.69%, which is now the most-active contract, gained $ 7.90, or 0.6%, to $ 1,426.10 per ounce, with prices for the contract down 6.4% for the week. Platinum for July delivery PLN23, +0.29% rose $ 1.80, or 0.2%, to $ 1,028.10 per ounce, but lost 4.4% for the week.
  • Copper for July delivery HGN23, +2.42% gained 9 cents, or 2.6%, to $ 3.68 per pound, with prices posting a loss of 1.3% for the week.

Market drivers

Precious metals analysts questioned whether gold’s pullback from its multiyear highs reached in early May is a sign of further declines to come, or just a short-lived pause before the yellow metal trudges higher.

Read: Why gold still has a shot to reach a record high this year

Gold has declined this week as “talks on the U.S. debt ceiling finally seem to be heading in a positive direction, with an agreement expected in the coming days,” said Rupert Rowling, a market analyst for Kinesis Money, in emailed commentary.

“Yet while gold is undoubtedly trending downward currently, it is worth remembering that $ 1,950 an ounce remains a very high level historically for the precious metal and it is still trading well over $ 100 an ounce higher than where it was at the start of the year,” he said.

Gold has lagged behind as the U.S. dollar has moved higher. A stronger dollar makes gold less affordable for buyers using foreign currencies.

The ICE U.S. Dollar Index DXY, -0.06%, a gauge of the buck’s value against its main rivals, was little changed at 104.21 in Friday dealings, trading 1% higher for the week.

Gold has “succumbed to another round of U.S. dollar buying,” said Tim Waterer, chief market analyst at KCM Trade, with the greenback “going form strength to strength in recent weeks” against a backdrop of Federal Reserve “rhetoric” and solid economic data forcing the market to scale back future interest-rate cut expectations.

With the dollar attracting “solid buying flows, gold looks vulnerable near term, unless something changes to take the wind out of the sales” of the dollar, said Waterer, in market commentary.