Gold Futures Gain for Second Week on Dollar, U.S. Growth
Gold futures gained for a second straight week as the dollar weakened and the U.S. economy grew less than expected in the second quarter, boosting demand for the metal as a store of value.
Gross domestic product in America rose at a 1.2 percent annualized rate last quarter, a government report showed. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent increase. A gauge of the dollar dropped for a fourth day and reached a four-week low.
Gold has rallied this year as the Federal Reserve delayed raising interest rates, making assets that don’t generate a yield more attractive for investors. Worries about the health of the global economy, the U.S. presidential election and the U.K.’s decision to leave the European Union have added to demand for haven assets, pushing bullion prices up about 28 percent in 2016.
“You just saw the probability of a rate hike fall, and that’s being reflected in the dollar and gold right now,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said in a telephone interview. “If we see consistent numbers like we’re seeing this morning with this GDP number, we can assume no hike is going to happen, and gold is going to respond favorably to that.”
Gold futures for December delivery rose 1.2 percent to settle at $1,357.50 an ounce at 1:45 p.m. on the Comex in New York. Prices climbed 2.8 percent this month.
Holdings in exchange-traded funds backed by gold added 2.65 metric tons to 2,002 tons on Thursday, data compiled by Bloomberg show.
In other precious metals:
- Most-active silver futures have rallied 9.3 percent this month. Prices for the September contract added 0.8 percent Friday to $20.347 an ounce on the Comex.
- On the New York Mercantile Exchange, platinum and palladium gained.