Gold futures edged higher Friday, heading for a slight weekly gain as investors in the precious metal responded to the risk of fiscal deadlock in Washington, the possibility of a Brexit without an E.U. trade deal, and some signs of U.S. inflation in commodity prices.
Gold’s moves for the week have been in fits and starts, with market technicians pointing to the belief that the yellow metal’s recent failure to take flight is due to technical factors.
“Gold price has failed to continue its recovery, falling again below the support zone of $1,850,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades.
February gold rose $4.20, or 0.2%, to trade at $1,841.60 an ounce, at last check, following a nearly 0.1% drop for bullion on Thursday to mark the lowest finish for a most-active contract since Dec. 2, according to FactSet data.
March silver was trading a penny higher at $24.11 an ounce, following a 0.4% gain in the previous session.
For the week, gold is on pace to end virtually unchanged while silver is headed for a 0.7% loss.
Markets have been on edge as U.K. Prime Minister Boris Johnson said Britain needs to brace for the likelihood that a post-Brexit trade deal with the European Union won’t happen, and investors also were watching a lack of productive negotiations out of Washington on fresh coronavirus fiscal aid.
Politico reported that Department of Homeland Security and President Donald Trump’s border wall remain sticking points to finalizing an omnibus spending deal.
In U.S. economic data, producer-price index rose just 0.1% in November, the smallest rise in seven months, and the 12-month increase in PPI advanced to 0.8%.
However, some market participants said that other measures of inflation, including the Commodity Research Bureau Index, or CRB, are pointing to higher prices.
“Bottom line, while the November PPI numbers look benign in the aggregate, the CRB commodity index was up 11% in the month alone so expect that to filter through in the months to come and as seen in the pipeline stage of inflation,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.