Gold and silver prices continued to decline on Friday, influenced by robust U.S. economic data that strengthened the dollar and heightened expectations that the Federal Reserve is unlikely to reduce interest rates in the near term. Spot gold declined by 0.3%, settling at $4,601.53 per ounce as of 0217. Prices remain positioned for an approximate 2% weekly increase following their ascent to a historic high of $4,642.72 on Wednesday. U.S. gold futures for February delivery experienced a decline of 0.4%, settling at $4,605.20.
The dollar appeared set to achieve a third consecutive weekly gain on Friday following the release of data from the U.S. The Labor Department reported that weekly initial jobless claims for state unemployment benefits decreased by 9,000, reaching a seasonally adjusted total of 198,000. This figure falls short of the expectations set by economists, who anticipated 215,000 claims. A stronger dollar increases the cost of dollar-denominated metals for international purchasers. Gold, characterized as a non-yielding asset, gains from low interest rates as they diminish the opportunity cost associated with holding it.
The allure of gold as a safe haven diminished further as geopolitical tensions subsided. U.S. President Donald Trump stated that he was informed of a decline in fatalities resulting from the crackdown on protests in Iran and expressed skepticism regarding any plans for mass executions by the authorities. China’s central bank announced on Thursday reductions to sector-specific interest rates aimed at delivering an early stimulus to the economy. Poland’s central bank aims to increase its gold reserves to 700 tons, as stated by its governor on Thursday. Meanwhile, the SPDR Gold Trust, recognized as the largest gold-backed exchange-traded fund globally, reported a slight increase of 0.05% in its holdings, reaching 1,074.80 tons on the same day.
Individual investors have been acquiring silver at an unprecedented rate, resulting in it becoming the most congested commodity trade in the market, as indicated by a report released on Thursday by Vanda Research. TD Securities announced on Wednesday in a model portfolio update that it has closed a short silver position following prices reaching its exit level at $93.15 an ounce, leading to a theoretical loss of approximately $606,000. Spot silver declined by 1.6%, now priced at $90.80 per ounce. It was on track for a weekly gain of approximately 13% following its achievement of an all-time high of $93.57 in the prior session. Spot platinum experienced a decline of nearly 2%, settling at $2,363.11 per ounce, whereas palladium decreased by 0.8%, reaching $1,786.13 per ounce.