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Metals Stocks: Gold edges higher but set to close the week flat

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Gold futures were inching higher Friday in an attempt to claw back from the lowest finish for the commodity in more than six weeks and end the week virtually unchanged.

December gold
GCZ21,
+0.06%

GC00,
+0.06%

was trading $2.50 higher, or 0.2%, to reach $1,752.50 an ounce on the session, following a 1.6% drop on Thursday, which represented the sharpest one-day dollar and percentage decline for bullion since Sept. 16.  

Bullion has been under pressure since the Federal Reserve on Wednesday signaled its intent to “soon” taper its bond purchases and raise interest rates by late next year, which could dim appetite for bullion if investors shift to assets that offer yields. The central bank’s projections of interest-rate increases also pointed to rate increases as early as 2022, which could also dent demand for precious metals.

For the week, however, gold was hanging near the unchanged mark.

Analysts said that absent a near-term catalyst, gold may be more influenced by U.S. dollar moves and risk appetite.

“Moving forward, investors should understand that, unless anything noteworthy happens to the dollar index, gold prices will likely be influenced more by investors’ risk appetite,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a daily note.

The dollar was up 0.1% on the week and down 0.2% on Friday, as measured by the ICE U.S. Dollar Index
DXY,
-0.18%
,
a measure of the buck against a half-dozen currencies.

Meanwhile, silver for December delivery
SIZ21,
-0.63%

SI00,
-0.63%

was trading 15 cents, or 0.7%, lower, at $22.53 an ounce, following a 1% decline on Thursday. For the week, silver is up 0.8%.

Moves for precious metals could be capped as Treasury yields climb, with the 10-year Treasury note
TMUBMUSD10Y,
1.427%

touching 1.425% in overnight trading. Rising rates can undercut demand for precious metals which don’t offer a coupon.

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