Gold futures finished with a modest loss on Friday to break a four session string of gains, but the metal still scored its best weekly percentage gain in nearly two years.
“Gold, like many other assets, is ebbing and flowing in reaction to stimulus assumptions,” said Jonathan Citrin, founder and executive chairman at investment firm CitrinGroup. And this week, Federal Reserve Chairman Ben Bernanke and crew “leaned once again toward loose policy.”
Gold for August delivery GCQ3 +0.93% shed $2.30, or 0.2%, to settle at $1,277.60 an ounce on the Comex division of the New York Mercantile Exchange.
For the week, prices were 5.4% higher. That was their first weekly gain in four weeks, and the biggest weekly percentage climb since the week ended Oct. 28, 2011, according to FactSet data, tracking the most-active contracts.
“Volatility in gold has been epic in recent weeks and months,” said Vedant Mimani, lead portfolio manager of the Atyant Capital Global Opportunities Fund.
The pullback Friday was “just a little settling down from yesterday’s big jump and before the weekend as traders get ready to tackle next week,” he said.
Prices briefly turned a bit higher Friday following an unexpected decline in consumer sentiment. The preliminary July reading of the University of Michigan and Thomson Reuters consumer-sentiment index reportedly declined to 83.9 from a final June reading of 84.1. Economists polled by MarketWatch expected the reading to be unchanged.
Gold prices on Thursday jumped $32.50, or 2.6%, marking their fourth-straight win, the longest winning streak since mid-March.
“Gold has turned here for a good recovery bounce, as the technicals are extremely oversold, leading to a run into the mid/upper $1,300 in coming weeks,” wrote Felix Zulauf, president of Zulauf Asset Management, in a report for Itaú BBA.
But not everyone was as upbeat as gold turned lower on Friday.
”I think gold is currently stuck between $1,150 and $1,327, the low following the first selloff in April,” said Ole Hansen, head of commodity strategy at Saxo Bank. “Speculative investors remain short and are probably happy to be that as long as $1,327 does not get breached.”
The week’s gain for gold came as the U.S. dollar DXY -0.04% dropped sharply Thursday following indications by Bernanke that the Fed isn’t in a hurry to raise interest rates, even after unemployment reaches the Fed’s target of 6.5%. A weaker dollar helps dollar-denominated commodities by making them less expensive to buy for holders of other currencies.
At the same time, quantitative easing by the Fed and other central banks had underpinned a long-running rally in gold prices, analysts have said.
Gold futures have tumbled around 24% this year on worries the Fed will start winding down its bond-buying program and on continued gold sales from exchange-traded funds.
Total gold in trust for the SPDR Gold Trust GLD -0.09% remained unchanged Thursday, compared with Wednesday. Shares of the ETF fell 0.5% in Friday afternoon trading.
Metals mining firms also declined, with the Philadelphia Gold and Silver Index XAU -2.34% 3.3% lower.
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On Comex Friday, September silver SIU3 +1.25% gave up 16 cents, or 0.8%, to end at $19.79 an ounce after a 4.1% jump on Thursday. The contract saw a gain of 5.6% for the week.
September copper HGU3 +0.10% slipped 2 cents, or 0.7%, to $3.155 a pound, up 2.9% for the week.
Platinum for October delivery PLV3 +0.75% closed down 70 cents at $1,406.90 an ounce, while September palladium PAU3 +0.96% gained $4.70, or 0.7%, to $722.90 an ounce. Both contracts ended over 6% higher for the week following a recent strike by mine workers in South Africa.