Gold futures log back-to-back weekly losses

New York (July 22)  Gold futures settled lower Friday, posting losses for a second week in a row, with strength in the U.S. dollar and stock market in the wake of the latest earnings results, dulling some of the metal’s investment appeal.

August gold GCQ6, -0.65%  lost $7.60, or 0.6%, to settle at $1,323.40 an ounce, with prices logging a modest weekly loss of about 0.3%, after last week’s 2.3% drop, according to FactSet data. The metal touched a one-month low Thursday before ending that session higher.

“It appears gold is finding support just above the $1,300 level just as the stock market’s rally looks like it is getting tired,” said Michael Armbruster, principal and co-founder at Altavest. “More important than the direction of the U.S. dollar, if the equity market starts to pullback, look for gold to re-accelerate to the upside.”

The U.S. Dollar Index DXY, +0.40%  rose 0.5% and U.S. stocks traded mostly higher, but the Dow Jones Industrial Average DJIA, +0.29% was looking at a narrow weekly gain of less than 0.2% by the time gold prices settled Friday. Strength and weakness in the greenback and the stock market can impact gold’s appeal as a safe-haven investment.

September silver SIU6, -0.73% fell 12.6 cents, or 0.6%, to $19.689—for a weekly loss of around 2.4%. The metal’s midweek close at $19.613 was the lowest settlement since July 1.

Bigger picture, the dollar gained and precious metals fell this week as even a go-slow Federal Reserve is seen as more likely to raise interest rates sooner than any of its global counterparts. On Thursday, the European Central Bank left interest rates unchanged at record lows. Still, debate over what’s next for global interest rates continues: Asian stock markets fell as absence of stimulus-plan specifics in Europe and Japan shook investor confidence.

In the short term, “it is difficult to say where gold will be trading next,” said Edward Meir, independent commodity consultant at INTL FCStone, in a note. “The ECB announcement was inconclusive in that although the central bank deferred from initiating any additional easing, it did leave the door open for future moves…so the next effect on gold is arguably a wash.”

Despite the interest-rate tug, global demand looks to underpin gold prices, offsetting dollar- and stock-linked volatility in the near term, said analysts at Commerzbank

Data from the Swiss Federal Customs Administration show that Switzerland exported more gold to Asia again in June. Exports to Hong Kong in particular grew sharply, soaring by nearly 50% month-on-month to 35.8 tons. Exports to China remained virtually unchanged at the previous month’s level, while exports to India picked up somewhat. Last month, Switzerland’s combined exports to Hong Kong, China and India totaled 75 tons. This was the highest volume since January and points to reviving gold demand in Asia.

“Figures showing gold trading between Hong Kong and the Chinese mainland could therefore prove surprisingly positive when they are published next week,” the Commerzbank analysts said in a note.

What’s more, according to data from the customs authorities, China imported 248 tons of silver in June, which is a good 10% more than last June. First half year imports were a good 6% up year-over-year at 1,453 tons.

Among the exchange-traded funds, the SPDR Gold Trust GLD, -0.75% the world’s largest gold-backed ETF, fell 0.8%, trading around 0.4% lower on the week, while the VanEck Vectors Gold Miners ETF GDX, -0.31%  shed 0.2%, down about 3.5% for the week.

October platinum PLV6, -1.87% fell $19.60, or 1.8%, to $1,088.40 an ounce, posting a weekly loss of 0.6%. September palladium PAU6, +0.20% ended at $686.05 an ounce, up 60 cents, or 0.1%, for the day and up about 6% from the week-ago settlement, while September copper HGU6, -1.02% fell 2.3 cents, or 1%, to $2.236 a pound, but with prices up roughly 0.1% for the week. Some upbeat economic data have helped to lift prospects for industrial metals palladium and copper, analysts said.

Source: MarketWatch