· Gold prices logged their highest settlement in a month on Friday, tacking on more than 2% for the week, as turmoil in the White House and weakness in the U.S. dollar spurred haven demand for the precious metal.
· August gold GCQ7, -0.01% rose $9.40, or 0.8%, to settle at $1,254.90 an ounce. The settlement was the highest since June 23, according to FactSet data. Prices scored a weekly gain of 2.2%, after a rise of 1.5% the previous week. Friday’s performance extended the stretch of session gains to six, matching the streak of wins logged through May 17.
· U.S. President Donald “Trump’s team falling apart and the investigation about Russian involvement [in the election] are the reasons” for the steeper climb in gold prices Friday, said Naeem Aslam, chief market analyst at ThinkMarkets UK.
· White House Press Secretary Sean Spicer quit Friday after telling Trump he disagreed with the hiring of Anthony Scaramucci as communications director, reports said.
The news comes as the investigation into ties between the Trump campaign and Russia heat up, prompting traders to seek out safer investments.
· “I think inflation expectations—stoked by FedSpeak and the Trump fiscal agenda [that was evident earlier this year]—was an important driving force behind gold’s rally in the first half of the year,” said Peter Grant, chief market analyst with gold broker USAGOLD, before the news of Spicer’s resignation Friday.
He believes investors “are giving up on that trade, which pressured gold.” Gold prices fell for five weeks in a row before posting a weekly rise in the week ended July 14.
“Amid rising evidence of price and growth risks, [those investors] are now being replaced by safe-haven buyers,” Grant said.
· On Friday, gold breached thresholds that market technicians tend to view as indicating a bullish trend is under way. Notably, gold prices are trading above their 100- and 50-day moving averages, both around $1,250, as a broad measure of the U.S. unit, the ICE U.S. Dollar Index DXY, +0.01% which compares the buck against a half-dozen other currencies, traded about 1.8% lower month to date. A weaker dollar boosts investment demand for gold, which is pegged to greenback.
· On Friday, the index was down 0.4%, with the euro EURUSD, +0.0257% which represents the biggest weighting in the ICE dollar gauge, up 0.4% versus the greenback.
· “The dollar has been under serious assault, which has pushed the price of gold higher,” said Aslam. “As long as the dollar bleeds, we do think that the gold price would continue to move higher and could touch the level of $1,300.”
· In the U.S., economic data has been mixed, raising uncertainty surround the likelihood of another U.S. Federal Reserve interest-rate hike this year. The Fed will hold a two-day monetary policy meeting next week that ends Wednesday.
· Among other metals, September silver SIU7, -0.01% rose 11.2 cents, or 0.7%, to $16.457 an ounce, for 3.3% weekly gain.
Reference: Market Watch
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