Metals Stocks: Gold pulls back but set for biggest weekly gain since 2008

This post was originally published on this site

Gold futures pulled back Friday, but remained on track for the biggest weekly rise in more than 11 years in a rebound fueled in part by a weaker U.S. dollar and concerns about disruptions in the physical market.

Gold for April delivery GCJ20, -1.51%  on Comex fell $33.30, or 2%, to $1.617.90 an ounce, while May silver SIK20, -1.30%   dropped 22.6 cents, or 1.7%, to $14.45 an ounce. For the week, gold is up nearly 9%, which would mark the biggest weekly rise since December 2008, according to FactSet.

“Gold is headed for the biggest weekly gain since 2008, and a part of its advance is explained by the thinning physical supply as refineries slowed or ceased activity due to the coronavirus shutdowns,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note.

See: Gold suffers pricing issues as coronavirus shuts down supply sources

“But the latter caused liquidity issues across the gold markets, leaving traders wondering if the yellow metal offered the right protection through the shaky waters,” Ozkardeskaya said.

A retreat by the U.S. dollar Thursday after last week’s surge was also a positive for gold. A weaker dollar can be supportive for commodities priced in the unit, making them cheaper to users of other currencies. After surging last week amid a global scramble for dollars, the greenback retreated this week, with the ICE U.S. Dollar Index DXY, +0.29%  off more than 3% for its biggest one-week drop since 2009.

Add Comment