Gold ended higher Friday, trimming its weekly loss but it still suffered a fifth consecutive monthly decline-the longest such streak of losses in more than five years.
The metal firmed Friday even as the dollar, gold's leading influence of late, strengthened, and as both markets kept tabs on the latest rhetoric out of Washington on tariffs.
December gold GCZ8, +0.16% edged up by $1.70, or 0.1%, to settle at $1,206.70 an ounce. The modest rise from Thursday's lowest close in a week, helped pare its weekly decline to about 0.5%. The metal saw an August loss of 2.2%, which was its fifth monthly slide in a row, the longest for a most-active contract since the five-month slump ended in February 2013, FactSet data show.
Gold and the dollar were confined to relatively narrow ranges, and riskier markets sputtered, as financial market participants took in the latest in the continuing trade scuffle between the Trump administration and major trading partners, including China. Trump told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, Bloomberg reported on Thursday.
"The trade war saga thus appears to have much more room to run," said Andreas Georgiou, investment analyst with brokerage XM. In addition to the China developments, the U.S. president rejected the EU's offer for zero tariffs on autos, calling the block "almost as bad as China" on trade. He also threatened to withdraw from the WTO, unless the organization "shapes up."
The ICE U.S. Dollar index DXY, +0.42% which has enjoyed a summer gain as it drew demand amid global trade uncertainty, climbed by 0.4% in Friday dealings. It was nearly flat for the week and trading up about 0.7% for the month. Dollar-priced gold often trades inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies.
The 10-year Treasury note TMUBMUSD10Y, +0.13% was testing a yield at around 2.85%, set to post a rise for the month, which can create some resistance for the nonyielding precious metal. Despite the trade uncertainty, U.S. stock indexes remained close to record levels, on track for strong gains for the week and month.
Looking ahead, September could be a brighter month for gold bulls if history repeats, writes Mark Hulbert. Since it began trading freely in the U.S. in the early 1970s, gold has produced an average gain of 2.1% in September.
Yet the prospect of higher U.S. interest rates next month and again before the end of the year has been a persistent overhang for the gold market. The Federal Reserve next meets on Sept. 25-26 and again in November and December.
U.S. economic data have been mostly supportive of a rate increase, with the August final reading of the University Michigan consumer sentiment index at 96.2, the weakest this year, but above market expectations.
Jeff Wright, executive vice president of GoldMining Inc., said he was surprised to see gold hold above $1,200 given the latest economic data and the dollar's reaction. He also said outflows from the SPDR Gold Shares exchange-traded fund have increased, "which will also put more pressure going forward on gold to the downside."
Higher U.S. rates raise the opportunity cost of holding gold, which yields no interest and can cost money to store and insure. That has been reflected in overall gold demand; the holdings of SPDR Gold Shares, the world's largest gold-backed ETF at 24.36 million ounces, are down 13% since late April, fund data shows.
And in Friday trading, the ETF GLD, -0.11% was early flat and the VanEck Vectors Gold Miners ETF GDX, -0.75% was down 0.4%, with both headed down for the week and month.
Rounding out metals action, December silver SIZ8, -0.13% fell nearly 0.3% to $14.557 an ounce. The contract saw a weekly decline of 2.3% and a fall of about 7.1% for August.
December copper HGZ8, -1.91% ended at $2.671 a pound, down 1.7% Friday, with the contract losing 6.4% in August. October platinum PLV8, -0.51% fell 0.6% to $787.10 an ounce, for a monthly loss of roughly 6.6%, while December PAZ8, +0.81% palladium rose 1% to $969.90 an ounce, for a 4.5% monthly climb.
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