Gold futures moved lower Friday as the dollar showed a modicum of strength, but intensifying global trade disputes were limiting losses for bullion, allowing it to hold on to a gain for the week.
August gold GCQ8, +0.00% edged down by 50 cents, or less than 0.1%, to $1,302.50 an ounce. The metal was holding on to a slight weekly advance of about 0.2%.
Price action “suggests that the yellow metal needs a fresh catalyst for its next major move,” said Lukman Otunuga, research analyst at FXTM. If the Group of Seven summit “concludes in a deadlock with trade tensions heightened, the yellow metal could benefit as investors rush to safety.”
Global trade disputes flared up as a meeting of leaders from the Group of Seven industrialized nations got under way in Canada.
See: Trump lashes out at Canada, France over trade — and will bail on G-7 summit early
President Donald Trump is locked in a feud between the U.S. and its North American allies Canada and Mexico as well as those with Europe and China, with French President Emmanuel Macron describing trade measures undertaken by Trump as an attempt at “hegemony,” and advocating for the U.S. being eliminated from the G-7.
“The six countries of the G-7 without the United States are a bigger market taken together than the American market. There will be no world hegemony if we know how to organize ourselves. And we don’t want there to be one,” French President Emmanuel Macron told a news conference flanked by Canadian Prime Minister Justin Trudeau in Ottawa on Thursday.
Earlier: Death knell for the G-7 may be at hand after hostile reaction to Trump tariffs
Heightened political friction is often a bullish factor for gold because the precious metal supports the perception of bullion as a haven asset, but traders were contending with a stronger dollar, which tends to weigh on commodities priced in the currency, like gold.
The ICE U.S. Dollar Index DXY, +0.11% a measure of the dollar against a half-dozen major currencies, traded 0.2% higher. For the week, the dollar gauge was down 0.4%, but trading 3.8% higher for the quarter, according to FactSet data.
“While risk aversion created from heightened trade concerns is positive for gold, expectations over higher U.S. interest rates are likely to threaten upside gains,” said Otunuga, in a daily note. “With the [Federal Reserve] expected to announce another interest rate increase next week, zero-yielding gold may face some headwinds down the road.”
On a technical basis, Chintan Karnani, chief market analyst at Insignia Consultants, told MarketWatch that August gold faces key resistance at $1,312.60. “Only a break of $1,312.60 will trigger another wave” of rising prices, he said.
Meanwhile, July silver SIN8, -0.15% lost 0.4% to $16.755 an ounce, with a weekly rise of 1.9% in sight as gold’s sister commodity outperforms its rival. July platinum PLN8, +0.67% added 0.5% to $904.80 an ounce, trading about 0.2% lower for the week, while September palladium PAU8, -0.25% shed 0.5% to $1,005 an ounce, with prices looking at a rise of 0.8% on the week.
July copper HGN8, +0.69% traded at $3.297 a pound, up 0.7% for the session so far, poised for a sharp weekly rise of 6.3%.
Among exchange-traded funds, SPDR Gold Shares GLD, +0.16% added less than 0.1%, on track for a 0.4% rise for the week. The iShares Silver Trust SLV, +0.38% rose 0.2%, but the VanEck Vectors Gold Miners ETF GDX, -0.49% fell 0.7%.