Bullion suffers sharpest daily skid in October
Gold futures finished lower Friday, with bullion registering its lowest settlement month to date, amid growing optimism on Sino-American trade talks and progress on Brexit.
Around the time gold futures settled, Bloomberg News reported that the U.S. and China reached a tentative partial agreement that may lead to a truce in the trade war. As part of the pact, China would agree to some agricultural concessions, while the U.S. would provide some relief on tariffs, the report said.
Gold futures showed little bearish reaction to the news at the settlement, with prices for the haven metal off the day’s worst levels.
December gold on Comex GCZ19, -0.49% fell $12.20, or 0.8%, to settle at $1,488.70 an ounce, falling further below the psychologically significant level at $1,500, but ending above the day’s low of $1,478. The most-active gold futures contract marked its lowest settlement and sharpest daily slump since Sept. 30, according to FactSet data. For the week, gold lost 1.6%—the biggest weekly percentage drop for the contract in over seven months.
Meanwhile, December silver SIZ19, -0.18% lost 5.8 cents, or 0.3%, to end at $17.544 an ounce, with gold’s sister metal logging a weekly decline of 0.5%.
Markets were buoyant after President Donald Trump offered an upbeat assessment of the talks and said he would meet with China Vice Premier Liu He on Friday, the final day of the most recent round of high-level trade discussions.
“Gold just needs to withstand the market relief that comes from a mini-trade deal,” said Edward Moya, senior market analyst at Oanda.
“Gold prices should regain footing next week as investors probably scrutinized the band-aid trade solution,” he said in a daily note. “Gold should be supported on global stimulus bets and skepticism a broader trade deal won’t be reached until after the election.”
Still, for now, optimism around a possible resolution has given a lift to stocks, while undercutting appetite for assets perceived as havens like gold and government bonds. The Dow Jones DJIA, +1.21% and the S&P 500 index SPX, +1.09% both climbed in Friday action.
Benchmark U.S. stock indexes also got a boost after preliminary data released from the University of Michigan on Friday also revealed that the consumer sentiment survey rose to a three-month high of 96 this month from 93.2 in September.
Meanwhile, growing hopes that U.K. and European leaders can reach a deal for Britain to leave the European Union also pushed equity markets higher and precious metals’ prices lower
In other metals dealings, December copper HGZ19, +0.40% added 0.6% to $2.628 a pound, for a weekly rise of 2.6%. January platinum PLF20, -0.70% shed 0.8% to $900.30 an ounce, paring its weekly rise to around 1.5%. December palladium PAZ19, -0.29% settled at $1,670.10 an ounce, down 0.4% Friday, though still saw a weekly climb of 1.7% after settling at a record high Thursday.
The SPDR Gold Shares exchange-traded fund GLD, -0.55% was down 0.7% in Friday dealings, trading 1.5% lower for the week.