Gold Futures Settle Higher, Post 4th Straight Weekly Gain

Gold futures settled higher on Friday, and recorded their fourth successive weekly gain, the longest streak in about eight months, amid speculation the Federal Reserve will be less aggressive on interest rate hikes.

The dollar’s rebound from recent losses limited gold’s upside. The dollar index climbed to 105.88 after data showed a much bigger than expected improvement in U.S. consumer sentiment in June. At 105.65, the index was about 0.55% up a little while ago.

The dollar index shed ground in recent sessions as signs of cooling consumer and producer price inflation in the United States prompted traders to pare bets of aggressive policy tightening by the Federal Reserve.

Odds of a 75-bps hike in September have fallen to around 34% on the back of weak CPI and PPI data.

Gold futures for December ended higher by $8.30 or about 0.5% at $1,815.50 an ounce. Gold futures gained 1.3% in the week.

Silver futures for September ended up by $0.349 at $20.698 an ounce, while Copper futures for September settled at $3.6685 per pound, down $0.0380 from the previous close.

A report from the University of Michigan today showed consumer sentiment in the U.S. has improved by much more than expected in the month of August.

The report showed the consumer sentiment index jumped to 55.1 in August from 51.5 in July. Economists had expected the index to inch up to 52.5.

With the bigger than expected increase, the consumer sentiment index continued to recover after hitting a record low 50.0 in June.

The University of Michigan also said one-year inflation expectations dipped to 5% in August from 5.2% in July, while five-year inflation expectations crept up 3% from 2.9%.

Surveys of Consumers Director Joanne Hsu noted one-year inflation expectations fell to the lowest level since February but were still well above the 4.6% reading from a year ago.

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