Gold prices trade near 6-week high as U.S. dollar weakens

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Gold prices rose on Friday to trade just shy of a 6-week high reached earlier this week as expectations that the Federal Reserve might be nearing the end of its interest rate-hiking cycle weighed on the U.S. dollar.

Price action
  • Gold futures for April delivery
    GC00,
    +1.31%

    GCJ23,
    +1.31%
    gained $16.70, or 0.9%, to $1,940 per ounce on Comex.

  • Silver futures for May delivery
    SI00,
    +1.86%

    SIK23,
    +1.86%
    climbed by 30 cents, or 1.4%, to $21.99 per ounce.

  • Platinum futures for April
    PAM23,
    +0.37%
    gained $23.10, or 2.3%, to $999.40 per ounce, while palladium futures for June
    PLN23,
    +1.73%
    increased by $7.20, or 0.5%, to $1,416 per ounce.

  • Copper futures for May
    HGK23,
    +1.20%
    increased by 7 cents, or 1.9%, to $3.94 per pound.

Market drivers

Precious metals analysts said gold is benefiting from the view that the Federal Reserve might end its cycle of interest-rate hikes at its meeting next week, delivering one final 25 basis point hike before standing pat.

“There is growing speculation that the Fed will repeat next week what the ECB has done this week – raise as expected, then pause. The expectations that the Fed is nearing the end of its tightening cycle have battered the US dollar,” said Raffi Boyadjian, lead investment analyst at XM.

The ECB lifted its policy rate by 50 basis points on Thursday but dropped its forward guidance, saying future hikes would depend on the state of economic data. Some said worries about the stability of U.S. regional banks and Swiss lender Credit Suisse — which recently agreed to borrow 50 billion francs ($54 billion) from the Swiss National Bank — might be giving the biggest central bank in Europe pause.

Hopes that the Fed’s policy interest rate might not rise above 5% were weighing on the U.S. dollar, a dynamic that typically benefits gold.

The ICE U.S. Dollar Index
DXY,
-0.19%,
a gauge of the dollar’s strength against a basket of rivals, was down 0.2% at 104.19.