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January
11
2020

Gold futures tally a third weekly rise
Myra P. Saefong

Gold’s price has swung 4.4% in this week’s trade, on a peak-to-trough basis

Gold futures ended higher Friday, finding support from weaker-than-expected monthly U.S. jobs data to score a third weekly climb, even as easing tensions in Middle East worked to dull haven demand for the precious metal. 

Gold had climbed past the “psychological $1,550 level as immediate reaction to the underwhelming December US nonfarm payrolls,” Han Tan, market analyst at FXTM, told MarketWatch. However, “bullion bulls are struggling to find cause for a sustained liftoff back to $1600 after the US and Iran appeared to walk away from the brink of an all-out conflict earlier this week.”

February gold GCG20, +0.20%  on Comex tacked on $5.80, or 0.4%, to settle at $1,560.10 an ounce. Prices had climbed to as high as $1,613.30 on an intraday basis Wednesday, the highest since 2013.

For the week, the most-active gold futures contract gained about 0.5%, which marked their third weekly rise in a row, but perhaps more telling is gold’s nearly 4.4% peak-to-trough move over the week. 

The backsliding in the precious commodity and jump in stocks over the five-session stretch follows a lessening of Middle East tensions that has restored risk appetite and produced a major drag on precious metals. 

On Wednesday President Donald Trump delivered remarks that underscored a move toward peace after a late-Tuesday Iranian airstrike on U.S. air bases in Iraq in an apparent retaliation for the killing of Iranian Maj. Gen. Qassem Soleimani a week ago. Separately, A Chinese envoy is set to go to Washington on Monday through Wednesday to firm up a phase-one trade agreement.

“The abruptness of the heightened US-Iran conflict over the past week...shows that investors cannot fully rule out heightened geopolitical risks, and such a sense of caution should keep Bullion relatively elevated above its 50- and 100-day moving averages, which currently reside in the high $1,400s,” said Tan.

Meanwhile, equity markets, which often move in the opposite direction of gold, were mixed, with the Dow Jones Industrial Average DJIA, -0.46% trading lower after tapping a record above 29,000 and the S&P 500 index SPX, -0.29% and the Nasdaq Composite Index COMP, -0.27%  trading modestly higher as gold futures settled.

Gold prices saw volatile trading after the release of the December employment report, before gradually making a climb toward the session high. The data showed showed the U.S. economy created a smaller-than-expected 145,000 jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%. Economists surveyed by MarketWatch had forecast, on average, a rise of 165,000, with Wall Street expecting a drop-off after a surprisingly robust 256,000 gain in November.

Among other metals, March silver SIH20, +0.14% added 16.9 cents, or 0.9%, to settle at $18.105 an ounce, for a weekly slide of roughly 0.3%. 

March copper HGH20, -0.12%  settled 0.4% higher at $2.8135 a pound, ending 1% higher for the week. April platinum PLJ20, -0.21%  rose 1.4% to $986 an ounce, but lost 0.4% for the week. 

Meanwhile, palladium finished at a fresh record. March palladium PAH20, +0.61% rose $12.50, or 0.6%, to $2,072.90 an ounce, with a weekly gain of 6%. 

“South Africa is seeing fresh power outages this week and that could contribute to fresh palladium supply-side concerns,” analysts at Zaner Metals wrote in a daily note.

 

 

 

Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.

 

 

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