Gold prices fell back below the key $1,800-an-ounce mark on Friday, settling with a weekly loss, their first in five weeks.

The ICE U.S. Dollar Index was slightly higher and Treasury yields also inched up Friday, “so gold had a double headwind,” said Michael Armbruster, managing partner at Altavest. Bullion tends to be sensitive to moves in the U.S. dollar and government debt yields, which can undercut appetite for precious metals.

“We think the dollar is likely to weaken through year end and Treasury yields show no sign that they will break out of their recent range,” Armbruster told MarketWatch. “Given gold’s strong negative correlation to the U.S. dollar index in recent weeks, we still like buying dips in gold below $1,800.”

December gold  
GC00,
-0.57%

GCZ21,
-0.57%

fell $7.90, or 0.4%, to settle at $1,792.10 an ounce after touching an intraday high of $1,806. Prices for the most-active contract lost 2.3% for the week. The precious metal finished 0.4% higher at $1,800 an ounce on Thursday, following declines in each of the two previous sessions.

December silver
SIZ21,
-1.29%

SI00,
-1.29%

settled at $23.90 an ounce, down nearly 1.2% for the session to lost roughly 3.6% for the week.

Thursday’s seesaw session came after weekly U.S. benefit jobless claims fell to the lowest since the pandemic began and the European Central Bank said it would slow asset purchases.

“The price appears to be profiting from the fall in bond yields in the U.S. yesterday following a successful bond auction that met with brisk demand,” said Daniel Briesemann, analyst at Commerzbank, in a note to clients.

Looking ahead, Sept. 22 “looms especially large for gold,” analysts at Citi Research wrote in a Thursday note, referring to the date of the next Federal Reserve announcement on monetary policy.

“Following a neutral Jackson Hole outcome and, more critically, a weak U.S. payrolls report for August amid delta variant spread, we push out expectations of a Fed taper announcement from September to November,” they said. “But a reduction in asset purchases still seems likely come December.”

The September FOMC is “not an easy call, and the initial market reaction to a ‘no taper announcement’ this month (our base case) could even play out as dovish on a headline read, unless it is balanced out with the dot plot and/or forward guidance,” the analysts at Citi said.

In Friday dealings, gold prices extended their losses shortly after data showed the U.S. producer price index climbed 0.7% in August, down from a 1% jump in July.

Against that backdrop, the ICE U.S. Dollar Index
DXY,
+0.11%

rose 0.1% to 92.592 in Friday dealings, on track for a weekly rise of 0.6%. The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.337%

rose to 1.334%, trading higher for the week.

In other metals trading Friday, December copper 
HGZ21,
+3.57%

rose 3.9% to $4.45 a pound, ending 2.7% higher for the week.

October platinum 
PLV21,
-2.13%

 fell nearly 1.9% to $956.50 an ounce, posting a weekly decline of more than 6%, while December palladium 
PAZ21,
-0.78%

 shed 0.8% to $2,126.30 an ounce, for a 12% loss on the week.

Both platinum and palladium have “gotten hammered this week as we have to suspect that difficulties in the global auto sector must be weighing” on platinum group metals demand,” said Edward Meir, analyst at ED&F Man Capital Markets, in a Thursday note.

Also see: Why spot uranium prices have climbed to a 6-year high

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