Gold prices headed higher on Friday as U.S. economic data underscored the damage from the COVID-19 pandemic on business activity and as concerns over U.S.-China trade tensions lifted haven demand for the metal, setting it up for its highest settlement in a month.
Investors are eyeing economic and political headlines that “increase global worries, as China tension becomes [a U.S. presidential] election issue,” George Gero, managing director at RBC Wealth Management, told Market Watch.
Gold for June delivery on Comex
GC00,
GCM20,
was up $10.90, or 0.6%, at $1,751.80 an ounce. Prices for the most-active contract look to mark their highest settlement since April 14, according to FactSet data.
Meanwhile, July silver
SIN20,
surged 75.4 cents, or 4.7%, to reach $16.91 an ounce, putting the industrial and precious metal near a psychologically significantly level at around $17 following a 3.1% rally in the previous session.
For the week, gold has gained more than 2% based on the most-active contract, while silver has rallied over 7% thus far this week.
Economic data Friday was mostly downbeat. U.S. retail sales tumbled by a record 16.4% in April and fell 16.2% excluding automobile sales and gas price, due to lockdown measures implemented to slow the worst viral outbreak in more than a century.
Meanwhile, a reading on business activity in the New York area, the New York Fed’s Empire State business conditions index, rose 29.7 points to minus 48.5 in May, the regional Fed bank said, marking the second-lowest reading on record.
U.S. industrial output fell by a record 11.2% in April, but the preliminary reading of the consumer-sentiment survey in May edged up to 73.7 from 71.8 in April, the University of Michigan said.
Metals have also been digesting reports of rising Sino-American tensions afterPresident Donald Trump moved to block shipments of semiconductors to Huawei Technologies, as the U.S. has blamed China for mishandling the outbreak of the coronavirus.
“The souring of US-China relations has been lifting the safe-haven gold, which is fast approaching April’s 7-year high,” wrote Raffi Boyadjian, senior investment analyst at XM, in a daily research note.
Among other metals, July copper
HGN20,
fell by 0.4% to $2.336 a pound, with most-active contract prices on track for a weekly loss of 2.8%. July
PLN20,
tacked on 4% to $805.90 an ounce—up around 2% for the week, and June palladium
PAM20,
rose 1.9% to $1,832.30 an ounce, with prices trading up about 0.6% for the week.
