Gold prices ended Friday at their lowest level in just over two weeks, generally tethered to the dollar this week yet supported by persistent global political and trade tensions given the metal's haven-asset status.
However, Friday's "trading action indicates that the impact of political turmoil is fleeting and that investors' primary focus remains on the economy and monetary policy," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Against this backdrop, April gold GCJ8, -0.30% fell $5.50, or 0.4%, to settle at $1,312.30 an ounce. It saw its lowest finish since March 1 and lost roughly 0.9% for the week, according to FactSet data. That was the biggest weekly fall since the week ended Feb. 23.
"Gold's lower close this week is bearish and could see gold test support at the $1,300 an ounce to $1,305 an ounce level," said Mark O'Byrne, research director at GoldCore in Dublin.
"However, we expect this level to be supported given the bullish factors supporting gold, including the turmoil in the Trump administration, the risk of a trade war and the deepening tensions between the U.S., the U.K., NATO and Russia," he said.
Traders in the financial market have been weighing the potential for more turmoil in the Trump administration. Media reports said the president was planning to sack his national security adviser H.R. McMaster, which would be the second high-profile firing from the White House this week. Secretary of State Rex Tillerson was fired on Tuesday and replaced with Central Intelligence Agency Director Mike Pompeo.
While personnel issues unfold, concerns over a possible trade war between the U.S. and key trading partners were still weighing on investors's minds as well, analysts said. The White House said on Wednesday it will seek to trim the U.S.'s trade deficit with China by $100 billion, using tariffs. The European Union, meanwhile, was working to get the bloc exempt from the tariffs.
As gold settled, the ICE U.S. Dollar Index DXY, +0.07% was up less than 0.1% at 90.22, swinging to a week-to-date rise of just over 0.1%. Gold and the dollar typically move inversely, as moves in the U.S. unit can influence the attractiveness of commodities to holders of other currencies.
"It is noticeable that the worst-performing currencies were the commodity currencies. These are getting hit in anticipation that the U.S. will target China more directly with a variety of specific trade restrictions, which could dampen Chinese demand for metals and other commodities," said Marshall Gittler, chief strategist at ACLS Global.
"In that respect, a trade war could boost [the U.S. dollar], although I don't think the Chinese would stand by idly and let this happen without any retribution - I think it would be likely to rebound on U.S. trade quickly, well before it helped to boost U.S. production and thereby narrow the trade deficit," Gittler said.
The market has been confined in a relatively tight range and so, gold market-timers looking for a buy signal need a clearer bearish sign, writes Mark Hulbert in his latest column.
U.S. economic data Friday, ahead of next week's Federal Reserve decision on monetary policy, showed February housing starts were down 7%, while industrial production for the same month jumped 1.1%. Consumer sentiment in March hit 14-year high.
Meanwhile, May silver SIK8, -0.50% settled 0.9% lower to $16.272 an ounce. It marked a nearly 2% weekly loss, according to FactSet.
May copper HGK8, -0.48% fell 0.6% to $3.108 a pound, settling down 0.9% on the week. April platinum PLJ8, -0.63% lost 0.7% to $950.20 an ounce, for a weekly decline of 1.5%, while June palladium PAM8, +1.02% ended at $988.55 an ounce, down 0.3% for the session, but up around 0.2% for the week.
Among exchange-traded funds, the silver-focused exchange-traded iShares Silver Trust SLV, -0.39% lost 0.2% and the SPDR Gold Shares GLD, -0.24% was down 0.5%. The VanEck Vectors Gold Miners ETFGDX, -0.09% added 0.3%. All three ETFs were set to end the week lower.