Gold futures on Friday posted the first loss in four sessions, as a steady dollar and perkier yields for government debt undercut some buying appetite for bullion, but prices for the metal eked out a fourth-straight weekly gain.
“Higher long Treasury yields are likely the catalyst for [the day’s] dip in gold prices,” Michael Armbruster, managing partner at Altavest, told MarketWatch.
“The good news for gold bugs is that gold’s technical and fundamental set up is turning much more bullish,” he said. “We have switched from selling rallies above $1,800 to buying dips below $1,800.”
Investors also parsed a report on U.S. retail sales that came in hotter than expected, with retail sales in June rising 0.6%, compared with consensus forecasts by economists surveyed by Dow Jones for a decline of 0.4%. Excluding auto sales, the retail rise was 1.3% last month, the data show.
Meanwhile, a preliminary reading of the University of Michigan’s index of U.S. consumer sentiment fell to 80.8 in July from a final reading of 85.5 in June, notching the measure’s lowest level since February.
Bullion, however, saw a weekly gain of about 0.2% to mark its fourth straight weekly rise, matching its longest such streak since the period ended May 28, FactSet data show.
Trading for gold comes as the 10-year Treasury note
was hanging around 1.30% and the dollar, as gauged by the ICE U.S. Dollar Index
was up less than 0.1%. For the week, the 10-year yield was around 6 basis points lower, while the dollar was up 0.6% on the week, FactSet data show.
Still, gold has been mostly buoyant as investors fret about the spread of the COVID-19 delta variant and the fitful reopening of the global economy, as well as concerns that U.S. markets are topping out.
“The easy part of the rise is left behind, and now the bulls have to prove that they are serious,” about pushing gold to further gains, said Alex Kuptsikevich, a senior market analyst at FxPro.
“Despite the sustained presence, buyers are acting much more cautiously or simply have less strength,” the analyst wrote. “Fundamentally, the trend was shaped by the soft monetary policy of the major central banks, led by the Fed,” the FXPro researcher wrote.
Indeed, Federal Reserve Chairman Jerome Powell, in congressional testimony this week, said that removing some of the Fed’s stimulus was a ways away as the labor market struggles to rebound from the pandemic.
The central bank chief also described inflation as a short-lived phenomenon that would eventually revert to the mean after a COVID-fueled surge that has been stoked by supply shortages amid spiking demand. His testimony before the Senate Banking Committee on Thursday offered a similar message.
Meanwhile, silver futures for September delivery
lost 60 cents, or 2.3%, to settle at nearly $25.80 an ounce, after 0.5% rise on Thursday. Silver suffered a 1.7% weekly decline, its second in a row.
settled flat at $4.32 a pound, ending down 0.5% for the week.
shed 2.6% to $1,108.50 an ounce, but holding onto a 1.2% rise for the week, while September palladium
fell 3.4% to $2,637.30 an ounce, for a weekly loss of 6.6%.