Gold futures settled lower on Friday, failing to get a lift from a round of weak economic data out of China or a softer U.S. dollar as bears looked for the precious metal to continue its retreat from more-than-six-year highs set last month.
"Gold is finding comfort within a $20 trading range as investors remain cautiously optimistic over the United States and China finalizing a 'phase one' trade agreement," Lukman Otunuga, senior research analyst at FXTM, told MarketWatch. "Gold is positioned to remain range-bound until a fresh directional catalyst is brought into the picture."
"A sense of optimism surrounding the current Brexit developments is also impacting appetite for the safe-haven metal," he said.
Gold for December delivery on Comex GCZ19, -0.05% fell $4.20, or 0.3%, to settle at $1,494.10 an ounce. That cut the weekly gain for the most-active contract to about 0.4%, according to FactSet data. December silver SIZ19, -0.05% lost 3.4 cents, or 0.2%, to end at $17.578 an ounce, for a weekly rise of 0.2%.
The ICE U.S. dollar index DXY, -0.48% touched a two month low on Friday, pressured by strength in sterling GBPUSD, -0.0231% and the euro EURUSD, +0.1343% after news of new Brexit agreement this week. The tentative deal must still be approved by the British parliament and other European Union member states.
Gold briefly traded above $1,560 early last month and remains up nearly 17% in the year to date, but the metal has trimmed those gains as U.S. Treasury yields edged higher. Falling yields can be a boon for non-yielding assets by reducing the opportunity cost of holding them, while rising yields can be a negative.
Bears contend a less aggressive-than-expected Federal Reserve could keep gold under pressure.
"Looking ahead, we expect investors to pare back further their expectations for monetary easing in the U.S.," said Caroline Bain, chief commodities economist at Capital Economics.
"In our view, markets are still anticipating too many rate cuts from the Fed. Meanwhile, a stabilization in government bond yields outside of the U.S. should halt the increase in the level of negative-yielding debt, reducing the investment appeal of gold," she said.
China's National Bureau of Statistics said growth of the world's second-largest economy slowed to 6% growth in the third quarter from a 6.2% pace in the second quarter, and the slowest pace since the early 1990s. The pace was in the middle of the central government's full-year target for gross domestic product, as business investment continued to deteriorate.
In other metals trade, January platinum PLF20, +0.07% rose 0.3% to $895.90 an ounce, for a weekly loss of 0.5%, while December palladium PAZ19, +0.54% lost 0.8% to $1,716.90 an ounce, for a rise of just 2.8% for the week.
December copper HGZ19, +0.30% rose 1.5% to $2.636 a pound, building a rise of 0.3% for the week.