Gold futures on Friday scored a third-consecutive session gain, with escalating tensions between Ukraine and Russia and a broad decline in U.S. equities fueling the metal’s first weekly price gain two weeks.
Gold for June delivery GCM4 -0.42% advanced by $10.20, or 0.8%, to settle at $1,300.80 an ounce on the Comex division of the New York Mercantile Exchange, with prices gaining roughly 0.5% for the week. Prices hadn’t closed above $1,300 since April 16. Read: Peter Schiff says reckless Fed may push gold to $5,000.
May silver SIK4 -0.91% was little changed for the session, closing at $19.69 an ounce, but was also up around 0.5% for the week. “During the past couple of months, gold seems to have found a comfortable base range to trade within,” said Richard Gotterer, managing director and senior financial advisor at Wescott Financial Advisory Group. “Movements up or down within this range have been based on changes in sentiment relating to economic data, corporate earnings and global conflicts.” “With Russia and the Ukraine dominating the global conflict front, any potential for increased military action is going to put a floor in gold’s trading range, with an upward bias,” he said. “However, when the conflict simmers down, expect gold to lose that flight to safety support.”
On Friday, news reports said Ukrainian Prime Minister Arseniy Yatsenyuk accused Russia of wanting to start a third world war by occupying Ukraine. U.S. President Barack Obama said he would consult Friday with European leaders about the crisis in Ukraine and continued to warn he was prepared to move ahead with more sanctions against Russia.
The Ukrainian PM indicating Russia wishes for wider conflict or confrontation “does not bode well for quick resolution and as such, numerous parties want additional gold over the weekend,” said Jeffrey Wright, managing director at H.C. Wainwright. The Standard & Poor’s Ratings Services’ downgrade of Russia “also plays into this theme and is a direct impact of initial sanctions, which also support gold’s safe-haven status.”
A rise in U.S. consumer sentiment failed to put a dent in gold prices. Data showed a final April reading of 84.1, the highest reading since July.
Next week: focus on earnings, economy
Next week’s focus for gold “continues to be on corporate earnings and economic data,” said Gotterer, adding that the highlight will be Friday’s employment report.
For now, a broad decline among U.S. equities , after a batch of disappointing financial results, contributed to some safe-haven investment demand for gold.
On Thursday, gold managed to push to its highest level in a week, even as a strong report from Apple AAPL -0.35% helped lure investors back into stocks. Gold ended with strong gains after erasing an earlier slump, rebounding on concerns over Ukraine, analysts said. “The severe fluctuations in the gold and silver prices were accompanied by high trading volumes on the Comex [on Thursday],” said Carsten Fritsch, commodity strategist at Commerzbank. “Especially in the case of silver, 130,000 futures contracts were traded — twice as many as in the preceding days — which points to speculative and technically-oriented investors. On the other hand, the high volatility could deter physical buyers which would put short-term pressure on prices.”
Elsewhere in metals trading, July platinum PLN4 -0.47% rose $14.70, or 1%, to end at $1,424.30 an ounce — 0.3% lower for the week, while June palladium PAM4 -0.53% rose $8.90, or 1.1%, to $811.20 an ounce, up about 0.5% on the week.
High-grade copper for May delivery HGK4 +0.15% ended less than a half cent higher at $3.125 a pound, but saw a gain of about 2.6% for the week.
Gold and silver miners saw their shares trade broadly higher, with the Philadelphia Gold and Silver Index XAU +1.65% up 0.6% Friday afternoon, set for a gain of 2.2% for the week. Shares of Newmont Mining Corp. NEM -0.08% added 2.3% in Friday trading after the company reported first-quarter earnings that topped analysts’ forecast.
Shares of the SPDR Gold Trust GLD -0.02% were up 0.6%, about 0.5% higher for the week.