Metals Stocks: Gold heads for daily, weekly loss as haven dollar lifted by Turkey’s unease

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Gold futures fell modestly Friday, hurt by a firmer dollar as the greenback drew global buying interest as a shelter from a currency crisis in Turkey and market volatility kicking up in Russia.

Gold, too, has historically had a role as a haven asset in times of global market turbulence. Instead, the precious metal’s inverse relationship to a firmer dollar, boosted in large part by rising U.S. interest rates relative to other major economies, has held the upper hand recently, as it did again on Friday.

December gold

GCZ8, +0.09%

 fell $1.90, or 0.2%, at $1,218.00 an ounce. The contract is headed for a 0.4% weekly decline after early-week gains gave way to a retreat Thursday and so far on Friday. The commodity, which remains near the lows of the year, is down about 1.2% for August so far and off about 8.6% in the year to date.

Global markets stumbled following a Financial Times report that the European Central Bank is growing more concerned about exposure of European banks to Turkey’s woes. The Turkish lira

USDTRY, +10.8469%

 plunged to its lowest in a year against the U.S. dollar on Friday.

“Since gold is also denominated in dollars, a strengthening greenback renders the yellow metal less attractive for investors using foreign currencies,” said Marios Hadjikyriacos, market strategist with brokerage XM. “That said, considering how much the dollar has soared since yesterday, gold has been holding up relatively well, admittedly, with the area around $1,200 providing notable support.”

Read: Worried about Turkey? Here’s what it will take to push Wall Street’s buttons

The ICE U.S. Dollar Index

DXY, +0.43%

 was up 0.4% at 96.04 Friday, hitting a roughly one-year high. And the 10-year Treasury note yield

TMUBMUSD10Y, -1.06%

 lost 3.6 basis points to 2.899%, a day after marking its largest one-session yield decline since July 3, based on values around 3 p.m. Eastern, according to Dow Jones Market Data. U.S. stocks were expected lower, following downbeat trading in other major markets.

Russia’s market volatility added to the global theme. Newly announced U.S. sanctions—and the potential for a second round of actions in 90 days—roiled Russia’s currency and blue-chip stocks as the country braced for further economic pain amid uncertainties over the Trump administration’s commitment to enforcement. In Moscow, the ruble

USDRUB, +0.6261%

 shed as much as 5% against the dollar on Thursday and stock averages there plunged as much as 9%.

On the U.S. data front, consumer price indexes for July are due for release at 8:30 a.m. Eastern time, while a snapshot of the federal budget hits at 2 p.m. Financial markets continue to watch for any evidence that much knock the Fed off its projected path to raise interest rates twice more this year and three times next year.

See more in the U.S. Economic Calendar.

September silver

SIU8, -0.34%

fell 7 cents, or 0.5%, to $15.39 an ounce. The white metal remains down over 11% so far in 2018, falling a sharp 4.3% in just the past 30 days.

A popular metals exchange-traded fund, the SPDR Gold Trust

GLD, -0.15%

lost less than 0.1%. The comparable silver ETF, the iShares Silver Trust

SLV, +0.14%

was flat.

In other metals markets, September copper

HGU8, -0.71%

fell 2 cents, or 0.7%, to $2.746 a pound. October platinum

PLV8, -0.17%

fell $1.60, or 0.2%, at $832.50 an ounce, while September palladium

PAU8, -0.04%

fell $2.90, or 0.3%, to $895.50 an ounce.

Read: Another stock market risk: GDP growth is slowing across the globe

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Rachel Koning Beals is a MarketWatch news editor in Chicago.

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