Metals Stocks: Gold on track for biggest weekly gain since August

Personal Finance

Gold traded slightly higher Friday, on track to post its biggest weekly gain since August following market turmoil that sent stocks reeling and pressured Treasury yields and the U.S. dollar.

Gold for February delivery

GCG9, +0.47%

 on Comex rose $2.50, or 0.2%, to $1,246.10 an ounce, while March silver

SIH9, +0.77%

 gained 0.2% to $14.545 an ounce. For the week, gold is up 1.6%, which would be the biggest such gain since a 2.5% rise in the week ended Aug. 24, according to FactSet. Gold is trading near a five-month high, trimming its year-to-date loss to 4.8%.

But the weekly gain has left some analysts unimpressed against a backdrop that saw a sharp selloff in global equities, a fall in the U.S. dollar and bond yields, and investors begin to scale back expectations for future interest-rate increases by the Federal Reserve.

“Given this market backdrop, we would have expected a considerably more pronounced reaction from the gold price,” wrote analysts at Commerzbank, in a note.

U.S. stocks tumbled sharply on Thursday, before trimming losses ahead of the closing bell. Stock index futures pointed to a lower start for Wall Street ahead of the release of November jobs data. The ICE U.S. Dollar Index

DXY, -0.16%

a measure of the currency against a basket of six major rivals, was up 0.1% Friday but on pace for a 0.4% weekly decline, while the yield on the 10-year Treasury note

TMUBMUSD10Y, +0.59%

 rebounded around 2.6 basis points from a three-month low to trade at 2.897%.

A weaker dollar can boost commodities priced in the greenback as it makes it cheaper to users of other currencies. Lower bond yields can also be a positive for commodities, which don’t offer a yield.

In other metals trade, January platinum

PLF9, +0.03%

 lost $3.40, or 0.4%, to $786.20 an ounce, while March palladium

PAH9, +1.07%

 was up $1.10, or 0.1%, to $1,143 an ounce.

March copper

HGH9, +0.82%

 rose 1.2 cents, or 0.4%, to $2.755 a pound.

William Watts is MarketWatch’s deputy markets editor, based in New York. Follow him on Twitter @wlwatts.

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