Gold futures jumped on Friday, aiming for their seventh-straight positive session, and hurdling toward a nearly three-month high to wrap up the final trading day of 2017-a year in which the yellow metal will book a roughly 13% gain.
February gold GCG8, +0.61% the most active contract on Comex, rose $8, or 0.6%, to $1,305.30 an ounce, retaking the psychologically significant level of $1,300, approaching its highest settlement level since late September, according to FactSet data. Gold is headed for a roughly 2.3% gain for December, its best month since August.
Bigger picture, gold futures are headed for a gain of 13.4% this year based on the most active contract. Spot gold prices are headed for their largest annual rise since 2010.
Of course that otherwise solid performance was greatly upstaged by the 20%-to-30% gains for the Dow Jones Industrial Average DJIA, -0.48% the S&P 500SPX, -0.52% and the Nasdaq Composite Index COMP, -0.67% as risk-on sentiment framed 2017 and looked to set the tone as 2018 kicks off, dulling some of the appeal of haven gold. See Market Snapshot.
The gold-focused exchange-traded SPDR Gold Trust GLD, +0.65% was steady Friday, up 0.6%, heading for a roughly 13% gain for 2017, while the VanEck Vectors Gold Miners ETF GDX, +0.17% was up 0.3% on the session and looking at a 1.4% advance for the year.
Gold gained Friday as the ICE U.S. Dollar Index DXY, -0.41% was down 0.3%, trading at its lowest in roughly three months and deepening its 2017 loss to 9.7%-its most dramatic yearly slide since 2003. A weaker dollar tends to provide a boost to dollar-pegged commodities, making them more attractive to users of weaker monetary units. Analysts looking for even a slight rebound in the dollar in 2018, should inflation strengthen, believe the yellow metal isn't likely to repeat 2017's performance.
Gains were "easy come, easy go" for gold in 2017, said Carsten Fritsch, commodities analyst at Commerzbank, in a note.
Gold gains were "due primarily to the depreciation of the U.S. dollar, which was suffering from [President Donald] Trump's unpredictability and falling Fed rate-hike expectations [the Fed raised rates three times in 2017 and has sketched out more gradual rate increases in 2018]. As stock markets soared to ever new record levels, and the U.S. tax reform began to take shape, interest in gold dwindled in the autumn," he said.
Falling U.S. bond yields also were cited as a reason for dollar weakness and gold strength this week. The yield for the benchmark 10-year Treasury noteTMUBMUSD10Y, +0.00% logged its biggest one-day drop in more than three months on Wednesday, although yields had stabilized since, trading around 2.429% Friday.
Meanwhile, copper prices slipped Friday, on track to snap what had been a 16-session win streak, its longest ever, but remained near four-year highs. That level was scored this week amid strengthening bets on strong demand from China, which accounts for about half of global demand at 23.5 million metric tons.
March copper HGH8, -0.41% futures fell 2 cents, or 0.7%, to $3.2860 a pound. On Wednesday, it finished at $3.2840 a pound, the highest level since December 2013. Copper is headed for an over 31% gain in 2017, according to FactSet.
In addition to Chinese demand, political success with changes to the U.S. tax code have raised expectations that President Donald Trump's administration will be able to enact a bill to boost infrastructure spending, feeding the appetite for industrial metals, market participants said.
In other metals, March silver SIH8, +0.37% rose less than a penny, or 0.01%, to $16.925 an ounce. Silver futures on a continuous basis are headed for a nearly 6% gain this year.
Chris Gaffney, president of world markets at EverBank, says silver's relatively cheap price to gold leaves the white metal ripe to clear $20 an ounce in 2018 and even make a solid try at $25 by year-end. Read more of his predictions here.
March palladium PAH8, -0.78% fell $8.35, or 0.8%, at $1,055.10 an ounce. That barely dents the over 54% gain this year for futures on a continuous basis. April platinum PLF8, +0.27% meanwhile, added $1.70, or 0.2%, to $928.60 an ounce. Platinum futures are headed for a 3.2% gain in 2017, based on the most active contracts.
Read: How palladium and lumber defied the 2017 commodity slump