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Metals Stocks: Gold futures settle higher, end the week flat as dollar rebounds

Gold prices ended higher Friday as a modest rebound in the U.S. dollar was putting pressure on the yellow metal after the minutes of the Federal Reserve’s last meeting, released on Wednesday, helped send prices of precious metals higher.

Price action

Gold prices for December delivery
GC00,
+0.54%

GCZ22,
+0.54%

rose $8.40, or 0.5%, to end at $1,754 per ounce on Comex. The most-active contract ended the week nearly flat after losing 0.9% last week.

Silver prices for December
SIZ22,
+0.51%

delivery rose 6 cents, or 0.3%, to settle at $21.43 per ounce. The most-active contract booked a weekly gain of nearly 2.1%, according to Dow Jones Market Data.

Palladium prices for December
PAZ22,
-1.43%

slumped $54.40, or 2.9%, to finish at $1,821.50 per ounce, with a 6.1% of weekly loss. Platinum prices for January delivery
PLF23,
-0.72%

fell $9, or 0.9%, to end at $987.80 per ounce, for a weekly gain of 0.4%.

December copper prices
HGZ22,
-0.01%

lost 1 cent, or 0.3%, ending at $3.63 per pound, with prices down over 0.1% for the week.

What happened

Gold initially benefited from the Fed minutes’ message that members of the Fed’s policy-setting committee were generally leaning toward smaller interest-rate hikes going forward.

“The minutes were slightly dovish and ‘real’ Treasury yields fell in the aftermath. We think the Fed will stop tightening early next year and begin loosening in Q3, suggesting that investment demand for precious metals might receive a boost over 2023,” wrote Caroline Bain, chief commodities economist at Capital Economics.

However, on Friday, a slightly stronger dollar was helping to take some of the wind out of gold’s sails, precious metals analysts said, while subdued trading volume helped exaggerate the greenback’s impact.

The ICE U.S. Dollar index
DXY,
-0.11%
,
a gauge of the dollar’s strength against a basket of rivals, was nearly flat, at 106.03 on Friday, while the 10-year Treasury yield note 
TMUBMUSD10Y,
3.687%

 declined to 3.688% and the policy-sensitive 2-year Treasury
TMUBMUSD02Y,
4.479%

 was steady at 4.480%.

“Gold is marginally lower today (this morning) but has been quite choppy throughout the session, and broadly lacked any real direction. We could be seeing a little profit-taking as the dollar edges higher following the relief rally that followed the Fed minutes,” said Craig Erlam, senior market analyst at OANDA.

In addition, China’s central bank cut its requirements for how much deposits local banks must set aside against the credit that they extend, boosting lending to households and businesses and stimulating the world’s second largest economy in defiance of a global trend toward monetary tightening.

See: China cuts bank reserve requirements as lockdown fears spark panic in Beijing

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