Gold fell sharply on Friday, but held on to a weekly gain, on the heels of conflicting comments from the Trump administration on dollar policy.
Prices began to fall in electronic trading on Thursday after CNBC reported that President Donald Trump said he wanted to see a stronger dollar and expressed optimism that the battered U.S. currency would strengthen. On Friday, February gold GCG8, -1.04% lost $10.80, or 0.8%, to settle at $1,352.10 an ounce.
The precious metal still climbed about 1.4% for the week to date, to log its sixth such gain in seven weeks.
Gold's losses came in contrast to Thursday's regular session, when prices finished $6.60 higher at $1,362.90, the highest settlement for a most-active futures contract since Aug. 4, 2016. Gold was driven higher by the greenback, which has been tumbling in the wake of Wednesday's comments from Treasury Secretary Steven Mnuchin who said a "weak dollar was good for trade."
Gold, which is priced in dollars, often trades the opposite direction of the dollar, as moves in the U.S. unit can influence the attractiveness of the precious metal to holders of other currencies.
The Trump administration offered 'two different versions of the [dollar] policy simultaneously and the market will be in a guessing game as to which one is the actual policy.'Michael Kosares, USAGOLDThe Trump administration offered "two different versions of the [dollar] policy simultaneously and the market will be in a guessing game as to which one is the actual policy," said Michael Kosares, founder of gold broker USAGOLD.
But "given the dollar's performance over the past year or so, it looks like a weaker dollar is the market reality, at least for now," he said.
In Friday dealings, gold found little support, even as dollar turned weaker again. The ICE U.S. Dollar IndexDXY, -0.49% was last down 0.6% to 88.902 as gold prices settled, with the greenback notably continuing its march lower against the euro. The European Central Bank left key interest rates unchanged as expected on Thursday, while President Mario Draghi failed to say anything to stem the rising single currency EURUSD, +0.2420% which has gained nearly 4% against the dollar so far this year.
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Remarks by Trump in a speech at the World Economic Forum's annual meeting in Davos, Switzerland, left gold unbudged. The yellow metal remained lower after the Commerce Department said fourth quarter gross domestic product expanded at a 2.6% annual rate, coming in below the consensus forecast for a 3% gain.
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In other metals action, March silver SIH8, -1.28% fell 17.4 cents, or 1%, to $17.441 an ounce, for a weekly rise of roughly 2.4%. March copper HGH8, -0.53% fell 0.5% to $3.199 a pound, still tacking on about 0.4% for the week.
April platinum PLJ8, -1.81% slid 1.3% to $1,018.40 an ounce, for a weekly loss of nearly 0.2%. The March palladium contract PAH8, -1.03% fell 1.1% to $1,085.05 an ounce, fueling a loss of 1.2% for the week.
-Williams Watts contributed to this report