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Metals Stocks: Gold settles with a more than 5% weekly gain as the dollar softens to a 2-month low

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Gold prices on Friday marked another finish at their highest since August, up more than 5% for the week, as expectations that the Federal Reserve might slow the pace of interest-rate hikes in December have helped to boost the yellow metal, and contributed to a fall in the U.S. dollar index to an over two-month low.

Price action

Gold futures for December 
GCZ22,
+0.84%

GC00,
+0.84%

rose $15.70, or 0.9%, to settle at $1,769.40 per ounce on Comex — the highest finish for an most-active gold contract since Aug. 25, according to FactSet. Prices for the contract ended the week 5.5% higher.

Silver futures
SIZ22,
-0.17%

SI00,
-0.17%

for December fell 3 cents, or 0.2%, to $21.667 per ounce, but tallied a weekly gain of nearly 4.3%.

Palladium futures
PAZ22,
+3.47%

for December rose $72.30, or 3.7%, to $2,026.50 per ounce, ending over 10% higher for the week, while platinum futures
PLF23,
-1.43%

for January fell $16.90, or 1.6%, to $1,038.10 per ounce, for a weekly rise of 8.1%.

December copper
HGZ22,
+4.42%

rose 16 cents, or 4.1%, to $3.9135 per pound, with prices up 6.2% for the week.

What’s happening

Gold finished higher on Friday as the dollar tumbled to a more than two-month low, largely driven by the U.S. October consumer-price index data released Thursday, which helped stoke expectations that the dollar may have reached its peak, or at least is close to it.

The ICE U.S. Dollar Index
DXY,
-1.68%

was down 1.7% at 106.384 in Friday dealings, eyeing a weekly loss of more than 4%.

The dollar index continued to trade lower after data Friday showed the University of Michigan’s gauge of the U.S. consumer’s outlook fell 5.2 index points in November from 59.9 in October. Inflation expectations for the next year rose to 5.1% from 5% in the prior month, while five-year inflation expectations rose to 3% from 2.9% in October.

“Soaring prices are choking the global economic growth, which could also impact demand for metals,” Fawad Razaqzada, market analyst at City Index and FOREX.com, told MarketWatch.

“Gold has had a stellar week, but everything now [hinges] on the dollar,” he said. “The greenback is not dead, I don’t think.”

“The one eyed is still the king in the land of the blind, so I won’t expect to see further significant weakness in the dollar,” said Razaqzada, loosely referencing an old proverb to show that the greenback is still a standout despite its recent pullback. If the dollar does not see significant weakness from here, that “should hold gold back.”

Next week, the focus for gold will “turn to growth as we will have retail sales from China and the U.S. and GDP from Eurozone, among other things,” said Razaqzada.

Also on Comex Friday, prices for copper climbed as some signs that China may be easing back on its zero-COVID policy, which fueled optimism over demand for the industrial metal, analysts said.

Read: ‘Era of cheap’ copper prices may be coming to an end

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