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Gold prices rallied Friday to post their first weekly increase in five, as a pullback in the U.S. dollar and Treasury yields eased some concerns about further Federal Reserve rate hikes.
Front-month Comex gold (XAUUSD:CUR) for March delivery added +0.7% Friday to cap a 2.1% gain for the week to $1,847.70/oz, its highest settlement value since mid-February, while March Comex silver (XAGUSD:CUR) closed +1.5% to lift the week’s gain to 1.3%.
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The dollar has been the “primary driver” of price action in gold as investors assess the Fed’s rate path, Kitco’s Gary Wagner said.
The dollar’s bounce in February weighed on gold, but this week the Dollar Index finished with its first weekly loss in five.
However, gold could have a “make-or-break moment” next week as Fed Chair Jerome Powell will testify Wednesday on monetary policy to the House Financial Services Committee.
If Powell “sticks to the hawkish script and we don’t see a major downward revision to January and a strong job gain in February, gold could see this week’s rally evaporate,” Oanda’s Edward Moya wrote.
Gold prices hit YTD lows last week after reaching nine-month highs at the start of February.