Gold Underpinned by Safe-Haven Buying Ahead of G-7 Conference

U.S. stocks settled higher across the board on Friday, capping a week of solid gains in all three major stock indexes. However, the upside may have been limited by increasing tensions between the United States and key trade allies at the start of the G-7 conference.

In the cash market, the benchmark S&P 500 Index settled at 2779.03, up 8.66 or +0.31%. The blue chip Dow Jones Industrial Average finished at 25316.53, up 75.12 or +0.30% and the tech-based NASDAQ Composite closed at 7644.91, up 9.84 or +0.13%.

Individually, shares of Apple dropped 1 percent after Nikkei reported the company is warning suppliers about a sharp decline in parts orders.

U.S. Treasury Markets

U.S. Treasury yields held steady on Friday as most investors took to the sidelines ahead of the G-7 summit. The yield on the benchmark, 10-year Treasury note edged higher to 2.94 percent, while the yield on the 30-year Treasury bond inched up to 3.086 percent.

U.S. Economic Reports

It was a light day as far as reports were concerned. U.S. wholesale inventories were slightly higher than forecast in April amid increases in the stocks of motor vehicles and a range of other goods.

The Commerce Department said on Friday wholesale inventories edged up 0.1 percent instead of being unchanged as it reported last month. Stocks at wholesalers rose 0.2 percent in March. They increased 5.8 percent year-on-year in April.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil posted a volatile, two-sided trade on Friday before closing lower. The markets were underpinned early in the session as investors continued to express concerns over supply issues in Venezuela. However, prices retreated and turned lower on concerns about surging U.S. output and falling demand in China. Additionally, sellers also reacted to the news that J.P. Morgan cut its crude price forecast.

In other news, according to General Electric’s Baker Hughes energy services firm, U.S. energy companies added one oil rig in the week to June 8, bringing the total count to 862, the highest level since March 2015.

Gold

Gold futures traded mostly steady on Friday before settle 30 cents lower at $1302.70. Underpinning the market was light safe-haven buying ahead of the G-7 talks this week-end that could have a negative effect on the U.S. Dollar and a positive influence on dollar-denominated assets.

Helping to limit gains were expectations that the U.S. Federal Reserve will announce another rate increase next week. Higher rates make the U.S. Dollar a more attractive investment, while pressuring gold, a non-interest bearing instrument.