Gold futures tumbled to finish the holiday-shortened trading week. After rallying about 30% in 2024, the yellow metal aims to extend its solid performance. However, gold prices have struggled to maintain momentum over the past month amid a strengthening US dollar and rising Treasury yields.
February gold futures declined $12.40, or 0.46%, to $2,656.60 per ounce at 14:35 GMT on Friday on the COMEX division of the New York Mercantile Exchange. Gold rose 1% this week.
Silver, the sister commodity to gold, firmed above $30 to end the week. March silver futures advanced $0.275, or 0.92%, to $30.175 an ounce. The white metal was little changed this week. Like gold, silver prices are trying to repeat last year’s bullish run that saw them climb 30%.
With the Federal Reserve shifting to a more hawkish stance at last month’s policy meeting and President-elect Donald Trump proposing hefty tariffs, the greenback has witnessed incredible gains, which has applied pressure on the metals market.
The Fed expects to cut interest rates just twice in 2025 as inflationary pressures sparked concern among monetary policymakers.
The US Dollar Index (DXY), a gauge of the buck against a weighted basket of currencies, slipped 0.23% to 109.15 on Friday. However, the index has swelled 1% this week, adding to its rally of 6.5% over the past 12 months. The DXY is at a two-year high.
A stronger greenback is bearish for foreign investors because it makes it more expensive for foreign investors to purchase.
US Treasury yields have rocketed since September, though little changed throughout the Friday trading session. The benchmark ten-year yield was flat at 4.571%.
Rising yields are bearish for gold because they lift the opportunity cost of holding non-yielding bullion.
That said, gold could turn things around in January based on historically strong seasonal demand, says independent analyst Ross Norman.
“January has been consistently seeing the best price gains over the last 20 years as investors and asset allocators open fresh new long positions, coupled, of course, with good jewellery offtake for the festive season,” Norman stated.
In other metal commodities, February copper futures rose $0.025, or 0.62%, to $4.051 per pound. February platinum futures surged $24.40, or 2.65%, to $946.80 an ounce. February palladium futures jumped $10.40, or 1.14%, to $922.50 per ounce.