Gold futures declined on Friday, to post a loss of nearly 5% for the week—the largest weekly percentage loss since mid-March. Gold traders have had significant losses on the precious metal to the strength in the U.S. dollar this week.
What we know: Gold futures prices settled at $1.866.30/ounce, showing a loss of 0.56% at the last trading session of the week.
Rising COVID-19 caseloads in emerged markets have distorted investment strategies of global investors, as the world’s economic recovery seems to be fragile, driving investors into dollars, which has weighed on the bullion-asset.
On top of that, gold traders have also unwound some of their gold holdings as a part of this week’s equity-market sell-offs, which added to the pressures around precious metals.
Other precious metals such as palladium, platinum are also headed for their worst week since the COVID-19 pandemic began to impact financial markets.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, highlighted the key macros dampening the optimism of gold bull.
“Gold investors remain less than flattered by the procession of Fed speakers since the FOMC less dovish than expected retort on September 16.
“Most of the focus was still falling on the US Fed’s Charles Evans’ uncomplimentary for gold comments when he suggested that US interest rates go up before the 2% inflation target is hit.”
That said, the outlook remains positive for gold in the long term, on growing COVID-19 cases; also, high geopolitical uncertainty could keep the yellow metal above $1,700/ounce price level in the midterm.