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Gold prices took back some ground after a two-session skid as financial markets assessed the merits of Korea peace efforts and the first reading of first-quarter GDP, which came in slightly better than expected.
Gains for the yellow metal came even as a leading dollar measure also rose, with a pullback in the yield for the benchmark 10-year Treasury giving the commodity, which doesn’t offer a yield some ground to rise.
June gold finished $5.50, or 0.4%, higher at $1,323.40 an ounce, bouncing off its lowest closing level since March 20. June gold notched a 1.1% drop for the week as rising rates weighed on bullion.
A reading on gross domestic product in the first quarter showed slowing growth, but not as much as Wall Street expected, as businesses stepped in where consumer spending cooled. A separate report could prove more sensitive for inflation-wary markets—it showed worker compensation rising at the fastest pace since 2008. The cost of labor rose 0.8% in first quarter, to bring yearly gain to 2.7%.
Meanwhile, the final reading of the University of Michigan consumer sentiment index was 98.8, up from the initial reading of 97.8 but still below March’s level of 101.4.
Concerns over rapidly rising U.S. interest rates were still hanging over markets, as the yield on 10-year Treasury notes recently traded at its highest since January 2014, pushing above the closely watched 3% line, in part of rising inflation concerns. On Friday, it stood at 2.961%. Rising Treasury yields tend to dull demand for nonyielding bullion, at least in the short term.
The ICE U.S. Dollar Index was up 0.1% at 91.8. Its moves can influence appetite for dollar-priced commodities, including the yellow metal, to investors using other currencies.
Geopolitics remain in focus for the haven metals market after a historic meeting between North Korean leader Kim Jong Un and South Korean President Moon Jae-in. The two leaders signed a declaration that they will work toward a “complete denuclearization” of the Korean Peninsula and agreed to formally end the Korean War with a peace treaty. The outcome of that gathering could lay the groundwork for Kim’s planned meeting with U.S. President Donald Trump.
“De-escalation in the geopolitics continues as South and North Korean leaders met for the first time…President Trump must be appreciated for this, although it is a very different story if something else is going on behind the closed doors. Under those circumstances, we would see the risk-off rally skyrocketing because it will have a major impact on investor sentiment,” said Naeem Aslam, chief market analyst at Think Markets.
“The shining metal, for the time being, is trading in a range where the top side is capped by the resistance of $1,366 and the support is at $1,302,” said Aslam. “We need to break out of this ugly consolidation zone so a new trend could emerge and that would attract many traders who use technical analysis for their trading strategies.”
Elsewhere, investors might look ahead to next week’s trade talks between the U.S. and China in Beijing. Chinese tech stocks came under pressure on concerns more action could be taken against the sector.
The jobs report for April, set to be released next Friday, and the commencement of the Fed’s two-day policy meeting starting Tuesday, also will be in focus.
Elsewhere in the metals complex, May silver lost 8.5 cents, or 0.5%, to settle at $16.406 an ounce. July silver which is now the most-active contract, shed 7 cents, or 0.4%, at $16.497.
For the week, the May contract for silver declined by 4.6%, while the July contract fell by 4.2%.
May copper fell by 6.8 cents, or 2.2%, to $3.046 a pound, while the more active July contract declined by 6.85 cents, or 2.2%, to settle at $3.0695 a pound. Copper’s contract for May logged a weekly decline of 2.8%, while July’s registered a weekly fall of 2.7%
July platinum meanwhile, rose $6.30, 0.7%, to $916.40 an ounce, with a weekly slide of 1.6%.
June palladium gave up $16.05, or 1.6%, to end at $963 an ounce. The contract traded up nearly 1% month to date despite pulling back sharply in recent sessions. U.S. tensions with Russia, which threaten global supplies, have recently fueled strong weekly gains. For the week, however, the contract tumbled by 6.5%.
The SPDR Gold Shares exchange-traded fund gained 0.3% and the iShares Silver Trust slipped 0.3%. The VanEck Vectors Gold Miners rose 0.4%.