Gold futures finished sharply lower Friday, snapping a five-session streak of record settlements, as investors contended with a firming U.S. dollar and a monthly employment report on the U.S. labor market that fell mostly in line with expectations.
The decline for bullion comes as the dollar popped 0.8% higher in the session, approaching its first weekly gain in the past six weeks, dating back to a 0.3% weekly gain in the period ended June 19, as gauged by the ICE U.S. Dollar Index (DXY)
Weakness in the buck has been one of the key factors that had helped bullion notch five straight record gains since the end of July.
A weaker dollar can make assets, like gold, priced in the currency more appealing to overseas buyers.
Meanwhile, the metal also lost some ground following job-market data that fell in line with expectations. The U.S. added 1.76 million jobs in July and the unemployment rate fell to 10.2% from 11.1%, the Labor Department said. Consensus estimates from economists polled by MarketWatch had been for an increase of 1.7 million jobs on the month.
“The robust rebound in the greenback has triggered a wave of profit taking in gold,” wrote David Madden, market analyst at CMC Markets UK, in a note.
“The metal has been on a very bullish run recently and the weakness in the dollar was a fairly big factor behind the move, so now we are seeing the opposite,” he wrote.
Prices for the yellow metal and its sister commodity, silver, have been running higher as uncertainty around the long-term economic impact of the COVID-19 pandemic has spurred a modern-day gold and silver rush.
December gold (GCZ20)(GC00) lost $41.40, or 2%, to settle at $2,028, an ounce, after the metal rose 1% on Thursday. For the week, gold still managed a 2.1% weekly advance, based on the last Friday’s settlement for the most-active contract. The yellow has gained for nine consecutive weeks, marking its longest such streak since the period ended May 12, 2006.
Gold bugs are still bullish on the commodity in the longer term.
“As things stand, the global investment landscape only spells more upside for gold, which has been on a tear this quarter,” wrote Han Tan, market analyst at FXTM.
“The precious metal has surged by over 15 percent since June 30, with the $2100 psychological level within its near-term grasp,” he wrote.
“As things stand, the global investment landscape only spells more upside for gold, which has been on a tear this quarter,” wrote Han Tan, market analyst at FXTM.
“The precious metal has surged by over 15 percent since June 30, with the $2100 psychological level within its near-term grasp,” he wrote.
September silver (SIU20) meanwhile, gave up 86 cents, or 3%, to end at $27.540 an ounce, following a 5.6% surge for the precious and industrial metal. Silver logged a weekly gain of nearly 13.7%.
Commodity experts also watched rising tensions between the U.S. and China after President Donald Trump signed an executive order banning U.S.-based operators from working with China-based technology companies Tencent Holdings (TCEHY) and TikTok parent ByteDance. China is a big buyer of precious and industrial metals and political conflict with the U.S. can weigh on expectations for commodity demand.
Elsewhere on Comex, September copper (HGU20) lost 11.8 cents, or 4.1%, at $2.7925 a pound, contributing to a weekly decline of 2.6%. October platinum (PLV20) traded $43.50, or 4.3%, lower to settle at $970.40 an ounce, but boasts a weekly gain of 5.6%. September palladium (PAU20)shed $82.80, or 3.7%, to end at $2,176.60 an ounce, booking a weekly advance of 1.5%.
The post Gold prices snap 5-day record win streak, as dollar pops higher appeared first on MarketWatch and is written by Mark DeCambre
Original source: MarketWatch
