Investing.com - Gold futures ended Friday’s session at the lowest level in six weeks, as a combination of ongoing fears over the euro zone’s debt crisis and mounting concerns over the outlook for the global economy drove investors to the relative safety of the U.S. dollar.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery settled at USD1,722.65 a troy ounce by close of trade on Friday, losing 1.25% on the day.
Earlier in the session prices touched a daily low of USD1,716.95 a troy ounce, the cheapest since September 7. On the week, gold futures declined 1.85%, the second consecutive weekly drop.
Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,754.95, the high from October 17.
The European Union's closely-watched two-day summit ended Friday without major news to renew investor confidence in the region’s handling of its ongoing debt crisis.
In addition, Spain's prime minister signaled that Madrid was not ready to ask for a bailout, dampening market optimism the debt-strapped nation was moving closer to requesting a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
Market sentiment came under additional pressure after a report from the National Association of Realtors showed that sales of previously owned homes fell 1.7% in September, in line with expectations.
The news prompted investors to shun riskier assets, such as stocks and commodities and flock to traditional safe-haven assets, such as the U.S. dollar and Treasuries.
The euro fell against the greenback, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, advanced 0.4% Friday to settle the week at 79.72, the highest since October 16.
A combination of profit-taking and technical selling further weighed, after prices broke below key support levels close to their 50-day moving average of USD1,727-level, triggering fresh sell orders amid bearish chart signals.
The precious metal could see further losses in the near-term after having failed to break above the key USD1,800-level earlier in the month.
Gold futures rallied to an 11-month high of USD1,798.05 a troy ounce on October 5, boosted by ongoing expectations policymakers around the world will launch more stimulus to support the weak global economy.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
In the week ahead, investors will be focusing on U.S. data on third quarter economic growth, as well as the outcome of the Federal Reserve’s first policy meeting since the central bank announced a third round of quantitative easing in September.
The Fed vowed in mid-September to buy an average of USD40 billion of mortgage-backed securities a month until the economy shows significant improvement.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Elsewhere on the Comex, silver for December delivery dropped 2.35% on Friday to settle the week at USD32.08 a troy ounce. Earlier in the session, silver futures touched a low of USD31.94, the weakest level since September 4.
On the week, silver futures lost 4.2%, the second consecutive weekly decline.
Meanwhile, copper for December delivery tumbled almost 3% Friday to close the week at USD3.632 a pound, the lowest since September 7.
Copper prices lost 1.75% on the week, as growing fears over the health of the global economy dampened the appeal of the industrial metal.
Official data released earlier in the week showed that China’s third-quarter gross domestic product grew at an annualized rate of 7.4%, the weakest pace since the first quarter of 2009 and the seventh straight quarter of slower growth.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery settled at USD1,722.65 a troy ounce by close of trade on Friday, losing 1.25% on the day.
Earlier in the session prices touched a daily low of USD1,716.95 a troy ounce, the cheapest since September 7. On the week, gold futures declined 1.85%, the second consecutive weekly drop.
Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,754.95, the high from October 17.
The European Union's closely-watched two-day summit ended Friday without major news to renew investor confidence in the region’s handling of its ongoing debt crisis.
In addition, Spain's prime minister signaled that Madrid was not ready to ask for a bailout, dampening market optimism the debt-strapped nation was moving closer to requesting a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
Market sentiment came under additional pressure after a report from the National Association of Realtors showed that sales of previously owned homes fell 1.7% in September, in line with expectations.
The news prompted investors to shun riskier assets, such as stocks and commodities and flock to traditional safe-haven assets, such as the U.S. dollar and Treasuries.
The euro fell against the greenback, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, advanced 0.4% Friday to settle the week at 79.72, the highest since October 16.
A combination of profit-taking and technical selling further weighed, after prices broke below key support levels close to their 50-day moving average of USD1,727-level, triggering fresh sell orders amid bearish chart signals.
The precious metal could see further losses in the near-term after having failed to break above the key USD1,800-level earlier in the month.
Gold futures rallied to an 11-month high of USD1,798.05 a troy ounce on October 5, boosted by ongoing expectations policymakers around the world will launch more stimulus to support the weak global economy.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
In the week ahead, investors will be focusing on U.S. data on third quarter economic growth, as well as the outcome of the Federal Reserve’s first policy meeting since the central bank announced a third round of quantitative easing in September.
The Fed vowed in mid-September to buy an average of USD40 billion of mortgage-backed securities a month until the economy shows significant improvement.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Elsewhere on the Comex, silver for December delivery dropped 2.35% on Friday to settle the week at USD32.08 a troy ounce. Earlier in the session, silver futures touched a low of USD31.94, the weakest level since September 4.
On the week, silver futures lost 4.2%, the second consecutive weekly decline.
Meanwhile, copper for December delivery tumbled almost 3% Friday to close the week at USD3.632 a pound, the lowest since September 7.
Copper prices lost 1.75% on the week, as growing fears over the health of the global economy dampened the appeal of the industrial metal.
Official data released earlier in the week showed that China’s third-quarter gross domestic product grew at an annualized rate of 7.4%, the weakest pace since the first quarter of 2009 and the seventh straight quarter of slower growth.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.