Gold futures rose 1% to above $4,200 per ounce on a tepid US dollar and lower Treasury yields. The yellow metal has been entrenched in a tight range, but is on track for a weekly gain.
December gold futures surged $49.40, or 1.19%, to $4,206.40 per ounce at 12:08 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold is poised for a weekly jump of 0.9% but is down 3% year-to-date.
Despite the recent gains, gold is still firmly off its record high of $5,600 registered earlier this year.
Silver, the sister commodity to gold, topped $60 at the end of the trading week. November silver futures climbed $1.306, or 2.2%, to $60.73 an ounce. The white metal is flat this week and remains down almost 15% this year.
Global oil prices have eased a bit this week after President Donald Trump announced he will not attack Iran before next month’s midterm elections. But NBC News reported, citing unnamed sources, that the administration is planning to resume combat operations after the election.
Still, the drop in energy prices helped bring down US Treasury yields, softening inflation expectations.
This could be good news for those expecting the Federal Reserve to leave interest rates unchanged later this month.
“This strengthens the case for a Fed hold this month, weighing on the greenback and pulling yields back from their highs, creating prime conditions for a bullion recovery,” said Nikos Tzabouras, senior market analyst at Jefferies-owned Tradu.com, according to CNBC.
Yields on short- and long-dated Treasury bonds were little changed to finish the trading week. The benchmark ten-year was flat at 5.23%.
Lower rates are good for the metals market because they reduce the opportunity cost of holding non-yielding bullion.
Meanwhile, the US Dollar Index (DXY) was also flat, trading above 102.00. The index, a measure of the greenback against a weighted basket of currencies, will post a weekly gain of about 0.2% and is up 4% year-to-date.
A stronger dollar is bearish for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.
In other metal markets, November copper futures climbed $0.125, or 1.88%, to $6.692 per pound. November platinum futures advanced $49.40, or 3.01%, to $1,691.40 an ounce. November palladium futures surged $32.60, or 2.9%, to $1,158.00 per ounce.