Gold futures settled slightly higher, registering its sharpest weekly gain in more than a year, as the dollar extended a monthslong slump.
April goldGCJ8, -0.44% added 90 cents, or less than 0.1%, to $1,356.30 an ounce, marking its highest level in nearly three weeks. Gold booked a gain of 3% for the week, representing its biggest weekly rise since April 29, 2016, according to WSJ Market Group Data.
The gold-backed exchange-traded fund, SPDR Gold SharesGLD, -0.33% fell 1.7%, while the VanEck Vectors Gold Miners ETFGDX, -2.09%) gained 0.1%.
U.S. financial markets will close on Monday in observance of Presidents Day.
The ICE U.S. Dollar IndexDXY, +0.52% a measure of the currency against six main rivals, rose 0.7% to 89.20, but the gauge was headed toward its biggest weekly loss, down 1.4%, in about three weeks, after it hit its lowest mark since 2014 earlier this week. Precious metals often rise when the buck weakens because weakening greenback can make buying those assets cheaper for investors using other currencies.
Expectations the Federal Reserve could deliver as many as four interest-rate increases this year have grown after recent inflation figures and after the central bank shared its forecast of an inflation pickup later this year.
"Rising inflation, coupled with slightly weaker U.S. growth readings and a struggling dollar should continue to provide gold with an element of support," INTL FCStone analysts said in a research note.
Meanwhile, rising bond yields, in theory, should detract from the appetite for gold because precious metals don't bear a yield. However, accelerating inflation could also provide a lift for precious metals because it is often viewed as a hedge against inflation. Gold had been moving higher over the last few days after the futures contract erased 1.6% last week in its worst performance in two months.
Gold had limited reaction to the latest economic data. Import prices were up 1% in January, above the 0.6% increase forecast by economists polled by MarketWatch. A weak dollarDXY, +0.52% has been seen as another contributor to inflationary pressures through higher import costs. As U.S. growth accelerates toward the end of last year, the trade deficit widened to a nine-year high in 2017 in line with rising consumer spending.
Housing starts for January jumped 10% in January to an annual pace of 1.33 million, surpassing the 1.24 million forecast from surveyed economists. The University of Michigan's Consumer Sentiment index on February is set to come in at 10 a.m. Eastern, and is projected to edge lower to 95.3.
Mark Hulbert: Why commodities and gold won't protect you from inflation's punch
The yield on the 10-year Treasury noteTMUBMUSD10Y, +0.00% was at 2.885%. The yield hit 2.940%, the highest yield level since around January 2014, according to the WSJ Market Data Group.
U.S. stocks mostly climbed Friday, flirting with a sixth-straight winning session for equities, which have battled volatile sessions to carve out what's shaping up to be the best weekly performance in years for the gauges.
Metals trading demand in Asia was muted by the Lunar New Year holiday, closing markets in major consumer China, as well as in South Korea, Malaysia and Vietnam.
Metals markets also watched news that the U.S. Commerce Department is recommending a 24% tariff on steel imports from all countries, and a 7.7% tariff on aluminum imports, among other options. President Donald Trump is required to make decisions on the recommendations in April. The Commerce Department said the imports "threaten to impair the national security" of the U.S.
In other metals trading, March silverSIH8, -1.17% shed 8.4 cents, or 0.5%, to end at $16.712 an ounce, for the week it rose about 4%, marking is sharpest weekly climb since the last week in December. The silver-focused iShares Silver TrustSLV, -1.13% was off by 1.4%.
March copperHGH8, -0.22%added less than a penny, or about 0.1% to $3.2485 a pound. For the week, the industrial metal finished up 7%, marking its highest weekly gain since November, 2016.
April platinumPLJ8, +0.77%picked up $11.20, or 1.1%, to settle at $1,012.30 an ounce. The commodity rose more than 4% for its highest weekly return in more than a year.
March palladiumPAH8, +3.01% advanced $29.10, 2.9%. to $1,035.75 an ounce. The precious metal returned 4.5%, marking its steepest weekly rise since October.