Investing.com - Gold prices inched higher on Friday to settle at a more than one-week peak as a broadly weaker U.S. dollar due to skepticism over the Federal Reserve's ability to raise interest rates as much as it would like this year boosted the yellow metal.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose to an intraday high of $1,245.30 a troy ounce, the most since March 30, before paring gains to end at $1,243.80, up $6.30, or 0.51%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to a six-month low of 94.03 on Thursday. It ended Friday’s session at 94.22, down 0.42% for the week.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
For the week, gold prices rose $20.30, or 1.63%, the second straight weekly gain, amid indications the Fed will take a slow and cautious approach to raising interest rates this year.
Federal Reserve Chair Janet Yellen, in a conversation with former Fed chairmen on Thursday, said the U.S. economy is on a solid course and still on track to warrant further interest rate hikes.
Meanwhile, on Friday, New York Fed President William Dudley warned that the central bank must approach further rate hikes cautiously and gradually because of lingering external risks to the U.S. economy.
Minutes from the Fed's March policy meeting released Wednesday signaled that the central bank is unlikely to raise interest rates before June due to concerns over global economic growth.
A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Prices of the yellow metal are up nearly 14% so far this year as expectations faded that the Fed would move to normalize interest rates due to fears over a China-led global economic slowdown.
Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion.
Market players will be paying attention to a handful of FOMC member speeches in the week ahead to further judge the balance of opinion among policymakers on the prospect of further rate hikes.
U.S. data on retail sales and consumer price inflation will also be in focus as investors look for further indications on the strength of the economy.
Elsewhere in metals trading, silver futures for May delivery climbed 22.6 cents, or 1.49%, on Friday to settle at $15.38 a troy ounce after hitting a session high of $15.42, a level not seen since April 1. On the week, silver futures tacked on 35.5 cents, or 2.39%.
Also on the Comex, copper for May delivery eased up 1.0 cent, or 0.51%, on Friday to end at $2.087 a pound. On Thursday, copper fell to $2.067, the lowest since February 25, due to uncertainty about global growth.
For the week, New York-traded copper prices slumped 7.4 cents, or 3.42%, the third weekly loss in a row.
In the week ahead, market players will be turning their attention to key economic data out of China, with Friday’s first quarter GDP report in the spotlight.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 11
China is to release data on consumer and producer price inflation.
New York Fed President William Dudley and Dallas Fed President Rob Kaplan are scheduled to speak throughout the day.
Tuesday, April 12
Philadelphia Fed President Patrick Harker, San Francisco Fed President John Williams and Richmond Fed President Jeffrey Lacker are to deliver speeches.
Wednesday, April 13
China is to report on the trade balance.
The U.S. is to release reports on retail sales and producer price inflation.
Thursday, April 14
The U.S. is to release the weekly report on initial jobless claims as well as data on consumer price inflation, while Atlanta Fed President Dennis Lockhart and Fed Governor Jerome Powell are due to appear at Senate Banking subcommittee.
Friday, April 15
China is to publish what will be closely watched data on first quarter economic growth and industrial production.
The U.S. is to round up the week with data on consumer sentiment and industrial production, while Chicago Fed President Charles Evans is due to speak at a public event.