Metals finish off session low as U.S. stocks decline
Gold prices ended the week with a loss on Friday on the back of overall strength in the U.S. dollar, but held ground above the key $1,500-an-ounce mark as U.S. stocks traded lower following a report that the U.S. is looking to limit U.S. portfolio investments into China.
The Trump administration is considering delisting Chinese companies from U.S. stock exchanges as one of the options to limit investment, Bloomberg reported Friday.
“There was a spark of selling in equities right when that report came out…which caused investors to move into gold,” said James Hatzigiannis, senior strategist at Long Leaf Trading Group.
Gold prices managed to settle off the session’s worst levels, but still finished with a loss. “The metals market is more keen on the very strong U.S. dollar, which reached a new high for 2019 and has had the biggest influence on the price of gold the past couple days,” said Hatzigiannis.
The ICE U.S. Dollar Index DXY, -0.01%, a measure of the U.S. currency against a basket of six major rivals, was little changed at 99.08 but holding near a more-than-two-year high. The index is up 0.6% this week.
Gold for December delivery GCZ19, -0.21% on Comex declined $8.80, or 0.6%, to settle at $1,506.40 an ounce, the lowest finish for a most-active contract since Sept. 19, according to FactSet data. It lost 0.6% for the week. December silver SIZ19, -0.35% fell 26 cents, or 1.5%, at $17.652 an ounce, for a weekly loss of 1.1%.
The metal, a traditional haven, has lost ground despite a new round of U.S. political drama. A whistleblower report released on Thursday alleged that President Donald Trump attempted to coerce Ukraine to investigate Democratic rival Joe Biden, and that White House officials acted to cover up his actions. The controversy around the report prompted House Democrats this week to launch a formal impeachment inquiry. Indeed, markets overall have seen only a fleeting impact overall.
“The market does not really care about the impeachment process currently, because Trump should easily have support from the senate,” said Hatzigiannis.
Still, “this is a great buying point for gold right now as you have a huge amount of gold [exchange-traded fund] inflows the past couple of days, strong Chinese demand reported…central banks cutting rates, continuous global economic reports indicating a slowdown, and I do not see a China/U.S. trade deal happening anytime soon,” he said. “There is still too much uncertainty globally.”
Gold remains up more than 17% in the year to date, with gains tied by many analysts to escalations in the U.S.-China trade war and other geopolitical tensions.
In other metals trade, the most-active January platinum contract PLF20, +0.04% fell 0.7% to $936.10 an ounce, for a weekly loss of 1.4%, while December palladium PAZ19, +0.01% added 0.6% to $1,652.90 an ounce, ending 1.7% higher for the week.
December copper futures HGZ19, +0.06% rose 0.8% at $2.5975 a pound, paring its weekly loss to around 0.4%.
The SPDR Gold Shares ETF GLD, -0.51% traded down 0.2%, contributing to a weekly decline of 1%.