Gold futures fell Friday, booking their lowest close since Feb. 4 and extending a skid into a fourth straight week, as a surging U.S. dollar outweighs the yellow metal’s attractiveness as a hedge against inflation.
Gold for June delivery GC00, 0.33% GCM22, 0.33% fell $16.40, or 0.9%, to settle Friday at $1,808.20 an ounce on Comex, or the lowest close for the most-active contract since Feb. 4, 2022, according to Dow Jones Market Data. For the week, it fell 3.9%, its worst weekly tumble since June 18, 2021.
July silver SIN22, 0.81% rose 1.1%, to end at $21.001 an ounce, but while booking a 6.2% weekly tumble, its biggest since it fell 8.3% in the week ending Jan. 28, 2022.
The ICE U.S. Dollar Index DXY, -0.74%, a measure of the currency against a basket of six major rivals, was off 0.1% but rose about 0.9% on the week, hitting a level last seen 20 years ago. A stronger dollar is seen as a negative for commodities priced in the unit, making them more expensive to users of other currencies.
“The price of the metal continues to move lower towards the middle range of the $1800 level showing hopes of a speedy and strong rebound,” Peter Cardillo, chief market economist at Spartan Capital Securities, wrote in a weekly note Friday.
Cardillo also said his near-term price target was $1,850 to $1,905 for the precious metal, pointing to the hedge factor that favors gold due to inflation and geopolitical woes.
Even so, gold prices on Thursday plunged under the 200-day smooth moving average, “which is often a bearish factor for the instrument,” said Alex Kuptsikevich, senior market analyst at FxPro, in a note. “The current decline in the price makes us keep a close eye on further developments.”
“Potentially, a reversal to the upside from these levels could signal the start of a new wave of long-term growth, the first impulse of which was in 2018-2020, followed by a prolonged wide side trend,” he said. “A potential bull target, in this case, could be the $2,500 area.”
In other metals trade, July copper HGN22, 1.44% rose 1.8% to settle at $4.1750 a pound.