Lackluster trading in gold futures Thursday gave way to a solid move higher, as tepid trade in equity markets and persistent worries about U.S.-China trade tensions and sluggish global economic growth helped lift prices to their highest finish in roughly two weeks.
Gold for August delivery on Comex GCM19, -0.02% climbed $6.10, or 0.5%, to settle at $1,292.40 an ounce. That was the highest finish for a most-active contract since May 15, FactSet data show. Prices were hanging onto slight gains for the month as well as the week.
"Wall Street has a neutral outlook on gold and many investors are confused as to whether [Federal Reserve] capitulation will be enough to take prices higher," Edward Moya, senior market analyst at Oanda, told MarketWatch. "Trade tensions have failed to deliver a significant move higher because of the strong dollar."
Moya also said the rise in gold prices Thursday "stemmed" from comments from billionaire Thomas Kaplan, founder of Electrum Group, made to Bloomberg Wednesday afternoon. Kaplan told the news agency that he believes gold prices will increase to $3,000 to $5,000 if not higher depending on macro circumstances."
July silver SIN19, -0.05% rose 8 cents, or 0.6%, to $14.491 an ounce, extending its rebound to a second straight session after settling Tuesday at $14.32, the lowest price of the year so far.
Silver futures were set for a weekly skid of 0.8% and a month-to-date slide of 3.2%. The exchanged-traded gold fund, the SPDR Gold Shares GLD, +1.35% meanwhile, was trading up 0.2% for the week, with a 0.3% gain in sight for the month, and the silver-focused iShares Silver Trust SLV, +0.37% was set for a 0.4% weekly decline and drop of 3% in the month to date.
Precious metals have enjoyed some gains from the flight to perceived safety in gold during the Sino-American trade clashes, but worries about global demand and a strengthening dollar have also capped bullion's moves. market participants have said.
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On Thursday in New York, a popular gauge of the dollar, the ICE U.S. Dollar Index DXY, -0.54% traded nearly flat, while the Dow Jones Industrial Average DJIA, -1.41% and the S&P 500 index SPX, -1.32% were up modestly.
Fawad Razaqzada, technical analyst at Forex.com, attributed the metal's rise to a "combination of factors, ranging from a pullback in the dollar to equities fading from their highs." He also suggested that "there was pent up demand from investors seeking safety in recent weeks amid all the U.S.-China trade tensions and growth concerns."
Looking ahead, Razaqzada said he would be more confident of a move higher for gold it prices "were to reclaim that $1,300 hurdle again, for we have seen these sorts of price spikes before only to be proven short-lived."
In economic news, traders digested a second read of gross domestic product, which showed that the economy grew at a 3.1% annual pace in the first quarter, from an initial 3.2% estimate. Meanwhile, initial jobless claims, a rough way to measure layoffs, rose by 3,000 to 215,000 in the seven days ended May 25, the government said Thursday.
Separately, an advanced reading of wholesale inventories showed that the U.S. trade deficit in goods widened slightly in April, rising to a seasonally adjusted $72.1 billion from $71.9 billion.
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Among other Comex-traded metals, July copper HGN19, -0.38% fell by 0.4% to $2.654 a pound. July platinum PLN19, -0.15% settled at $794.10 an ounce, up 0.3%, while the most-active September palladium contract PAU19, -0.56% added 1.6% to $1,365.70 an ounce.