Gold futures on Friday were edging lower to end the week with a modest loss, but bullion was on track for a sharp weekly gain that has been partly driven by buying on concerns about rising inflation and an uneven recovery from the COVID-19 pandemic.
The yellow metal is often perceived to be a hedge against pricing pressures.
December gold
GCZ21,
GC00,
was trading $13.10, or 0.7%, lower at $1,789.50 an ounce, after settling up 0.2% on Thursday. The precious metal was headed for a weekly decline of 0.4% but was up 1.8% on the month thus far, which put it on track for the firmest monthly advance since July.
Gold has been struggling to retain its grip on a perch above $1,800, a psychologically significant level that is now seen by some as resistance for the precious metal.
Movements in the U.S. dollar, which precious metals are priced in, have been blamed for the metal’s choppy, rangebound trade of late.
“The price of Gold rose above the $1800 level, but once again failed to move towards breakout levels,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a daily note. “The inability to make a sustained climb above the $1850 area suggests a capped market that, for now, is still not ready to overcome a strong dollar,” the economist wrote.
“In the near term, we see the repeated movements of the year staying in place. In other words, a trading range without breaking down or up,” Cardillo wrote.
Silver for December delivery
SIZ21,
SI00,
meanwhile, was trading 24 cents, or 1%, lower to reach $23.89 an ounce following a 0.3% fall a day ago. Gold’s sister metal, however, was on pace for a 2.3% weekly decline, poised for an 8.3% climb for the commodity in October. If gains for silver futures hold it will mark its sharpest monthly rise since May.
This post was originally published on Market Watch
