Gold futures posted another record high to finish a bullish trading week. The yellow metal is rallying again as investors start to price in cuts to interest rates in June, an expectation weighing on the US dollar and Treasury yields. Will gold prices top $2,200 soon?
April gold futures surged $18.60, or 0.86%, to $2,183.60 per ounce at 15:10 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold prices are poised for a weekly gain of 4.5%, adding to their year-to-date jump of more than 5%.
Silver, the sister commodity to gold, struggled to emulate the rally. April silver futures tumbled $0.063, or 0.26%, to $24.515 an ounce. The white metal is poised for a weekly boost of 5%, with silver prices turning on positive on the year.
Gold prices are on track for the sixth consecutive day of record highs.
Market analysts say the primary reason for gold’s ascent is investor confidence that the Federal Reserve will cut interest rates at the June Federal Open Market Committee (FOMC) meeting.
This is bearish for government bond yields and the greenback.
The US Treasury market was mainly in the red on Friday, with the benchmark ten-year yield unchanged at 4.092%. The two-year yield shed 3.6 basis points to 4.478%, while the 30-year bond added 2.3 basis points to 4.269%.
Gold is sensitive to fluctuations in interest rates because it influences the opportuniy cost of holding non-yielding bullion.
The US Dollar Index (DXY), a gauge of the greenback against a basket of currecies, fell 0.18% to 102.63, from an opening of 102.82. The index will post a weekly loss of 1.2% and has pared its year-to-date gain to below 1.3%.
A weaker buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.
Meanwhile, traders are combing through the February jobs report. While the headline number topped economists’ expectations — 275,000 new jobs last month — the consensus is that it was a disappointing report. The unemployment rate shot up to 3.9%, January jobs were revised lower by 124,000, and most of the job creation was concentrated in government or government-funded sectors.
In other metal markets, April copper futures fell $0.031, or 0.79%, to $3.895 per pound. April platinum futures dropped $8.00, or 0.87%, to $915.40 an ounce. April palladium futures declined $8.90, or 0.85%, to $1,033.50 per ounce.