Gold futures closed Friday at one-week highs, breaking a two-week losing streak. The precious metal saw a weekly gain, supported by steady investment demand despite rising U.S. Treasury yields and a stronger dollar. Analysts noted that investors continue to find value in gold, with dips being actively bought. Forex.com market analyst Fawad Razaqzada suggested that the market may have found its bottom, as investors remain focused on inflation concerns.
Razaqzada highlighted that gold is proving its worth as an inflation hedge, with gold-backed ETFs receiving inflows even during the recent price decline. Saxo Bank's Ole Hansen pointed out two potential scenarios where high borrowing costs could ultimately benefit gold: an economic slowdown leading to lower yields and monetary easing, or rising government debt servicing costs prompting policy intervention.
This week's price action was driven by "bargain hunting at the lows, as a floor has been building in the $4,000-region," according to StoneX head of market analysis Rhona O'Connell. While she noted that a further Federal Reserve hike is already priced in, she cautioned that a significant breakthrough higher remains unlikely without a major unexpected event.
Front-month Comex gold for October delivery rose 1.4% to $4,191.00/oz, its highest settlement value in a week. Front-month Comex silver added 1.1% to $60.670/oz, with both metals gaining 1.4% and 2.7%, respectively, on Friday.