Gold futures on Friday stretched their streak of gains to an eighth straight session as a report that showed much weaker-than-expected U.S. jobs growth in May contributed to declines in the dollar and Treasury yields.
August gold on Comex GCQ19, -0.74% tacked on $3.40, or 0.3%, to settle at $1,346.10 an ounce, notching an eighth week of gains in a row, the longest streak of weekly increases since Jan. 5, 2018. The metal rose about 2.7% for the week, which was the biggest such gain since the week ended March 23, 2018, according to FactSet data, based on the most-active contracts. Prices stand at their highest finish since Feb. 20.
Read: Gold's latest rally hints at a return to record price levels
"The U.S. employment report was terrible, making the rate cut decision a lot easier for [Federal Reserve] officials," wrote Edward Moya, senior market analyst at Oanda, in an email update.
The U.S. created just 75,000 new jobs in May and employment gains earlier in the spring were revised down. The meager gains in May were far short of the 185,000 MarketWatch forecast.
"The Fed will want to see more data, with the labor market being a lagging indicator, [but] it seems safe to say broader data on the economy is likely to only deteriorate going forward," Moya said. "The trade war has damaged sentiment and will likely continue drive the recent deceleration in the economy."
Against that backdrop, the dollar, as gauged by the ICE U.S. Dollar Index DXY, +0.21% was down 0.5% at 96.540, for a weekly loss of about 1.2%. U.S. Treasury yields fell sharply, with the 10-year Treasury note yield TMUBMUSD10Y, +1.41% at its lowest level since September 2017. Both factors helped to boost appetite for dollar-denominated gold.
Trading in the precious metal among private investors jumped, with Friday gold trading volumes on BullionVault's online market for precious metals up 209% from the previous 365-day average, said Adrian Ash, director of research at BullionVault. Demand to buy grew 13% from the last 12 months daily average. However, the quantity of selling leapt by 362%.
BullionVault users have liquidated $10.5 million of gold since last Friday, pulling the total quantity of gold bullion vaulted for its clients down to the lowest since May 2018 at 38.6 metric tons, Ash said. "If this upswing in gold prices does mark the start of a longer-term break higher, private investors just don't believe it so far."
The price moves this week come as tension over trade policy between the U.S., China and Mexico prompted Federal Reserve Chairman Jerome Powell to suggest that an interest-rate reduction may be appropriate if tariff disputes weaken economic growth - a supportive environment for gold to gain amid lower rates and flight-to-safety bets.
"Expectations of a much more dovish Fed and the escalation in global trade conflicts should see gold continue to outperform as it remains very undervalued compared to U.S. stocks and other assets," said Mark O'Byrne, research director at GoldCore.
Meanwhile, July silver SIN19, -1.04% added 12.6 cents, or 0.9%, to $15.031 an ounce. The metal added 3.2% for the week. July copper HGN19, +0.15% fell 2.3 cents, or 0.9%, to $2.628 a pound, leading to a weekly fall of 0.5%.
July platinum PLN19, -0.01% rose $2.40, or 0.%, to $806.10 an ounce, adding roughly 1.5% for the week, while September palladium PAU19, -0.25% settled at $1,356 an ounce, up $6.90, or 0.5%, with its weekly gain at 1.8%.
Among exchange-traded funds, SPDR Gold Shares GLD, +0.56% added 0.5%, lifting its weekly climb to 2.6%.