Gold prices settle higher to cut their loss for the week

New York (Jan 20)  Gold futures settled higher Friday, cutting their loss for the week, as the risk of a U.S. government shutdown helped the precious metal rebound from the biggest one-day decline in more than a month.

“At this point, based on news reports, looks like a coin flip if there is going to be a shut down or not,” said Jeff Wright, chief investment officer of Wolfpack Capital, around the time gold prices settled Friday.

February gold GCG8, +0.29%  rose $5.90, or 0.4%, to settle at $1,333.10 an ounce. On Thursday, gold dropped $12, or 0.9%, to settle at $1,327.20 an ounce, the biggest single-session dollar and percentage fall since Dec. 7, according to FactSet data. For the week, gold fell about 0.1% following gains in each of the last five weeks.

On Wednesday, the contract settled at its highest level since Sept. 8.

“Taking a look at the technical picture, gold continues to fulfill the prerequisites of a bullish trend as there have been consistently higher highs and higher lows,” said Lukman Otunuga, research analyst at FXTM. “There is a possibility that a new higher low has been created at $1,324.15 and as such could provide a foundation for bulls to elevate prices back towards $1,340.”

“A decisive breakout and weekly close above $1,340 could pave a path towards $1,360,” he said.

On Friday, the U.S. dollar traded modestly higher, with the ICE U.S. Dollar Index DXY, +0.21% which measures the buck against a basket of six rivals, up less than 0.2% at 90.629 but ready to log a loss of around 0.4% for the week. The dollar has weakened as traders fretted over the possible government shutdown this weekend.

Gold, which is priced in dollars, often trades inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of the precious metal to holders of other currencies.

The House on Thursday passed a one-month spending bill that would keep the government funded through Feb. 16. But the stopgap measure lacks support to clear the Senate and the current interim funding bill expires at 12:01 a.m. Eastern Time on Saturday.

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U.S. economic data released Friday was downbeat, with consumer sentiment for January falling to a six-month low. Gold saw a temporary boost in the data’s wake, briefly climbing above $1,335 before paring back its gains.

A speech from Federal Reserve Vice Chair Randal Quarles in Washington Friday didn’t appear to offer any fresh hints on the central bank’s pace of interest-rate hikes this year. He told bank lawyers of his outline of deregulation aimed at some of the nation’s biggest banks.

Rounding out action in the metals, March silver SIH8, +0.42% rose 0.5% to $17.036 an ounce, ending about 0.6% lower for the week. March copper HGH8, -0.58%  fell 0.4% to $3.188 a pound, losing about 1% for the week.

March palladium PAH8, +0.50%  rose 0.5% to $1,098.40 an ounce, with prices suffering a 0.6% loss on the week, while April platinum PLJ8, +0.94% gained 1.3% to $1,020.10 an ounce, for a weekly rise of 2.5%.

Among exchange-traded funds, the SPDR Gold Shares GLD, +0.44%  added 0.5%, but held on to a weekly loss of around 0.4%. The iShares Silver Trust SLV, +0.50%  rose 0.5%, trading down 1.4% for the week.

MarketWatch

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