Gold futures ended higher Friday, closing the books on back-to-back positive trading weeks and padding a year-to-date gain that’s near 10%.
The metal built on modest gains after a flurry of economic news offered a mixed picture on the economy, data that could still back up expectations for continued, if modest, Federal Reserve interest-rate tightening deep into 2018.
February gold GCG8, +0.67% the most-active contract on Comex, rose $8.20, or 0.6%, to end at $1,278.80 an ounce. The SPDR Gold Trust GLD, +0.52% rose 0.6%, while the VanEck Vectors Gold Miners ETF GDX, +1.15% gained 1.1%.
On the data front, orders for durable, or long-lasting, goods rose 1.3% in November. But excluding transportation, orders fell 0.1% last month. Meanwhile, consumer spending jumped in November. Within that report, inflation as gauged by the PCE price index has risen 1.8% in the past 12 months, up from 1.6% in October. The core PCE index that excludes food and energy, a Fed favorite, rose 0.1%. That was enough to boost the annual rate to 1.5% in November from 1.4% in the prior month, still well below the Fed’s 2% target.
New-home sales soared 17.5% in November to a seasonally adjusted annual rate of 733,000—well above the consensus forecast for a rate of 658,000. Consumer sentiment continued to soften, but remained well above its average, with the final December reading of the University of Michigan consumer sentiment index coming in at 95.9 versus November’s 98.5.
“Technically, February gold futures bears still have the overall near-term technical advantage,” said Jim Wyckoff, senior analyst with Kitco.com. “However, recent upside price action suggests a market bottom is in place. Bulls’ next upside technical objective is pushing and closing prices above chart resistance at $1,300.00.”
Gold futures saw a 1.7% weekly gain. The yellow metal’s futures have climbed roughly 11% for the year, a gain largely accumulated in the early months. In fact, data show that prices have been confined to their narrowest trading range of any quarter in a decade in the last three months of 2017. Indeed, gold is still more than 7% off its intraday high for 2017 above $1,360 set in early September.
Gold gained Friday even as the ICE Dollar Index DXY, +0.03% tipped 0.1% higher at 93.36 and as stocks appeared headed for weekly gains after U.S. lawmakers passed a continuing resolution bill overnight to ensure the government can stay open though at least Jan. 19. Gold, which is priced in dollars, is highly sensitive to moves in its exchange rate. The two assets typically move inversely. And stock gains tend to, but don’t always, lure investors away from haven gold.
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.00% was little changed near 2.485%. Yields hit a nine-month high on Wednesday, boosted by expectations the U.S. tax overhaul could accelerate economic growth. Rising bond yields tend to lift the dollar and dull the attraction of nonyielding bullion.
President Donald Trump on Friday signed sweeping tax legislation into law.
The bill’s impact continues to be chewed over, however. Morgan Stanley, for one, warned that the official passage of the bill could represent a near-term top for the stock market. Tax-fueled stock gains helped drive gold prices to five-month lows earlier in December. Yet, some analysts say the risk that this stimulus invites stronger-than-desired inflation could underpin gold’s appeal as a hedge.
Among other metals, March silver SIH8, +1.30% rose 20 cents, or 1.2%, to an $16.44 an ounce. March copper HGH8, +0.84% rose 0.6% to $3.24 a pound.
January platinum PLF8, +0.02% rose 0.4% to $923 an ounce. March palladium PAH8, +0.11% ended 10 cents lower at $1,029.55 an ounce.
Read: How palladium and lumber defied the 2017 commodity slump