Gold Firms on Weaker Dollar, but Finishes Week Down Over 1-Percent

A few dollar-denominated commodities moved higher on Friday in response to a weaker U.S. Dollar, a drop in U.S. Treasury yields and softer-than-expected U.S. economic data.

The dollar was pressured against a basket of currencies after the initial reading on first-quarter gross domestic product came in at 2.3 percent. Although the figures was higher than the forecast, it was below the previous read of 2.9 percent. Furthermore, the report showed the weakest performance in consumer spending in nearly five years.

The reaction to the GDP data drove U.S. government debt yields lower on Friday. This news made the dollar a less-attractive investment.

Gold

Gold futures rose on Friday after the dollar retreated from its highest level since January 10 and U.S. Treasury yields backed off multi-year highs reached earlier in the week. However, investors said the prospect of a Korean denuclearization deal eroded bullion’s safe-haven appeal.

June Comex Gold settled at $1323.40, up $5.50 or +0.42%.

Copper

Copper prices plunged on Friday, driven lower by a steep drop in aluminum prices and a decline in demand caused by rising U.S. interest rates and a stronger U.S. Dollar.

July Comex High Grade Copper futures settled at $3.0460, down $0.0920 or -2.93%.

Aluminum prices fell after sources said sanctions-hit Russian producer Rusal will overhaul its management structure to restore shipments, further dampening fears of a supply shortfall.

In other news, Chile’s Escondida, the world’s largest copper mine, said on Thursday that early contract talks with its workers’ union ended without an agreement, setting the stage for legally scheduled negotiations to begin in June.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished marginally lower on Friday. The markets remained largely supported by concerns that the reimposition of sanctions on Iran by the United States would cause supply disruptions. The deteriorating political and economic situation in Venezuela that has led to a 40 percent decline in crude output in the past two years also underpinned prices.

Prices were capped by worries over increasing U.S. production. Additionally, U.S. drillers added five oil rigs this week, bringing the total count to 825, the highest level since March 2015, General Electric’s Baker Hughes energy services firm said.

Natural Gas

Natural gas prices were pressured on Friday amid worries that next week will feature few weather-related concerns and that inventories will grow. Traders are already starting to price in a storage build of 45 Bcf for the week-ending April 27.