Gold prices fell in early Friday trade, putting the yellow metal on track to book its lowest settlement in about a year, a day after the commodity snapped a two-session skid as concerns about global trade were relegated to the back burner.
August gold GCQ8, -0.61% lost $6.60, or 0.5%, at $1,240.20 an ounce. A close at that level would represent the lowest for a most-active contract since finishing at $1,233.20 on July 17, 2017, according to FactSet data. The contract is set for a 1.2% weekly decline.
A popular fund tracking gold, the SPDR Gold Shares GLD, +0.42% was on track to fall by about 0.6% so far this week.
A stronger dollar — which has drawn haven demand amid the clash over trade between the U.S. and China and pushed higher on rising-rate expectations — has been the most significant headwind for gold. A strengthening greenback can make commodities linked to the monetary unit, such as gold, more expensive to buyers using other currencies.
Indeed, the ICE U.S. Dollar Index DXY, +0.27% a measure of the buck against a half-dozen monetary units, has gained 1.2% thus far this week.
“Gold was pummeled and pounded by a broadly stronger dollar this week with prices sinking towards $1240 as of writing,” wrote Lukman Otunuga, research analyst at FXTM, in a Friday note.
“The bearish price action witnessed in recent weeks despite the growing risk aversion continues to suggest that gold is still losing its safe-haven allure. Bulls have simply failed to garner any support from global trade concerns and this continues to be reflected in prices,” he wrote.
Meanwhile, September silver SIU8, -1.14% shed 15 cents, or 1%, to $15.815 an ounce, on pace for its lowest close of 2018. Gold’s sister metal was eyeing a weekly decline of 1.6%, with the metal dogged by a downturn in industrials metals on the back of tariff tensions and a retreat for precious metals.
