Gold prices rallied on Friday to settle at a level not seen since late August as expectations for a further delay in U.S. interest-rate hikes weakened the U.S. dollar, lifting the metal’s investment appeal.
Gold for December delivery GCZ5, +0.99% jumped $11.60, or 1%, to settle at $1,155.90 an ounce on Comex for its highest settlement since Aug. 21. For the week, prices logged a gain of 1.7%.
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Late Thursday, the Federal Open Market Committee released the minutes from the meeting last month in which it had decided to hold rates near zero. Investors interpreted the minutes as further proof that U.S. interest rates may remain on hold for the rest of the year.
“Inflation concerns, coupled with potential lagging in global economic activity, are giving [the Fed] more room to punt on a year-end hike,” said Adam Koos, president of Libertas Wealth Management Group.
Against that backdrop, the U.S. dollar index DXY, -0.43% moved lower Friday, offering support for metals prices, including gold.
Gold doesn’t yield interest and competes more easily against assets that do, like Treasurys, when rates are pinned near zero. And, like most commodities, the metal is priced in dollars and becomes cheaper to buy for those using stronger currencies when the greenback softens.
“There are people looking…and thinking as long as uncertainty is in the global economy and China, the Fed are going to have to hold off” on rate increases, said David Govett, head of precious metals trading at brokerage Marex Spectron.
Other metals also finished higher Friday. Zinc rallied on the London Metal Exchangeafter Glencore PLC GLEN, +7.00% GLCNF, +8.20% 0805, +7.44% said it would cut its annual zinc production by about a third after a collapse in price of the industrial metal.
“The main reason for the reduction is to preserve the value of Glencore’s reserves in the ground at a time of low zinc and lead prices, which don't correctly value the scarce nature of our resources,” the company said in a statement.
Back on Comex, December high-grade copper HGZ5, +3.27% added 7.1 cents, or 3%, to $2.414 a pound for a weekly gain of 3.8%. Silver for the same monthSIZ5, +0.34% put on 5.2 cents, or 0.3%, to $15.818 an ounce, ending about 3.6% higher on the week. Read:Here’s the chart gold bugs don’t want you to see
January platinum PLF6, +2.89% climbed $25.80, or 2.7%, to $981.40 an ounce, up 7.9% for the week, while December palladium PAZ5, +1.23% gained $5, or 0.7%, to $708.15 an ounce, scoring a weekly rise of 1.5%.