Gold futures closed higher Friday, finding support as a surge by the U.S. dollar relented, but it still booked its worst monthly performance since September 2021.
Gold for June delivery GC00, 0.78% GCM22, 0.78% rose $20.40, or 1.1%, to settle at $1,911.70 an ounce on Comex Friday, handing the yellow metal a 1.2% weekly fall and a 2.1% monthly decline, after briefly topping the $2,000 level on April 18.
The precious metal’s monthly tumble marked its worst in seven months, and its biggest April drop since 2013, when gold futures shed 7.8%, according to Dow Jones Market Data.
July silver SIN22, -1.15% fell 0.4%, to $23.09 an ounce.
“Gold prices are seeing safe-haven demand as Europe grapples with its energy dependency on Russia, and Russia is putting the squeeze on supplying natural gas and oil to European countries,” said Jim Wyckoff, senior analyst at Kitco.com, in a Friday client note.
“The Russia-Ukraine war appears to be intensifying with Western nations supplying more weapons to Ukraine. Russian President Vladimir Putin is ratcheting up his anti-West rhetoric. All of the above suggests an ultimate outcome that is not favorable,” he wrote.
It also helped that the ICE U.S. Dollar Index DXY, -0.59%, a measure of the currency against a basket of six major rivals, was down 0.7% on Friday, a day after hitting a five-year high. Even so, the index remains up 4.7% in April.
“The price of gold was crushed this week with the dollar rising strongly, which we think may be attributed to a steep selloff in the equity markets,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a note.
“From a technical perspective, the market has undergone a serious setback. While the war and inflation factors make a solid case for gold to advance to new highs, the above combination we mentioned seems to be a depressing factor for the metal,” he wrote.
Despite the technical damage, the longer-term outlook remains positive, Cardillo said. “We would take advantage of the recent decline and add to long-term positions,” he wrote.
Economic data was also in focus, with the personal consumption price index, the Federal Reserve’s preferred measure of inflation, advancing 0.9% in March to an annual 6.6% rate. The increase stemmed largely from a surge in the cost of gas, with some signs that intense price pressures could begin to ease.
Friday also marked the last trading day in a brutal April for stocks and other corners of financial markets, with the S&P 500 index SPX, -2.94% headed for a 6.8% decline for the month. “Risk aversion is keener on this last trading day of the week and of the month,” said Wyckoff.
In other metals trade, July copper HGN22, -0.68% fell 0.6% to settle at $4.41 a pound Friday. July platinum PLN22, 2.47% rose 3.1% at $939.60 an ounce, while June palladium PAM22, 3.52% rose 4.4% to $2,307 an ounce.