Gold futures traded modestly higher Friday, on track for a weekly gain as the yellow metal remained above $1,800 an ounce, buoyed by a fall in bond yields and a desire to hedge against risk amid continued uncertainty over the economic outlook.
“With bullion on the cusp of five consecutive weeks of gains, the precious metal is reflecting the dynamics between hopes surrounding the global economic recovery and enduring concerns over the persistent nature of the pandemic,” said Han Tan, analyst at FXTM, in a note.
August gold GCQ20, +0.63% was up $11.80, or 0.7%, at $1,815.60 an ounce on Comex, while September silver SIU20, +1.12% rose 17.3 cents to $19.135 an ounce. Gold futures ended lower on Thursday, pulling back a day after scoring another settlement at the highest since September 2011, but the haven metal held ground above $1,800 an ounce after data showed weekly U.S. jobless benefit claims remained well above 1 million.
Gold is on track for a 1.4% weekly gain and is up more than 19% for the year to date. Analysts have tied gold’s rally in part to a continued fall in bond yields, which have eroded or eliminated the opportunity cost tied to holding non-yielding assets such as gold. In addition, gold has retained appeal amid worries that aggressive stimulus efforts could spark inflationary pressures.
“A weekly close above $1,800 could be very technically significant for the yellow metal. A close below may be a red flag after a decent run for gold over the last month,” said Craig Erlam, senior market analyst at Oanda, in a note.