Gold prices fell on Friday as a stronger dollar and rise in Treasury yields weighed on investors’ sentiment.
Though gold traded in the red on Friday, prices were still on track to notch up some mild weekly gains.
This will mark the third consecutive week of gains for gold.
Other precious metals such as palladium extended its heavy gains from the previous session due to risk to supply.
Among industrial metals, copper futures on the London Metal Exchange fell sharply by half a percentage.
Gold underpinned by safe-haven demand
Even as gold prices are down, the yellow metal is underpinned by geopolitical tensions and uncertainties surrounding the US Presidential elections.
In the Middle East, escalating tensions have increased safe-haven flows for gold.
Reuters reported on Friday that three Lebanese journalists were killed by a bombing of a guesthouse used by members of the international press.
This comes amid US Secretary of State Anthony Blinken’s visit to Doha, where he is scheduled to meet representatives from Israel and Qatar.
However, senior Hamas official Osama Hamdan told Lebanese pro-Hezbollah news agency Al-Mayadeen there was no change in the group’s position.
At the time of writing, the most-active December gold contract on COMEX was $2,741.60 per ounce, down 0.3% from the previous close.
US election keeps traders on toes
Adding to the series of developments in the Middle East is the news that Republican candidate Donald Trump is edging ahead in his battle with Vice President Kamala Harris.
According to reports, Trump is ahead in key states such as Wisconsin and North Carolina.
“This suggests he has a good chance of winning the US presidential election,” Joaquin Monfort, author at Fxstreet.com, said in a note.
“A Trump win would upset the existing geopolitical order and potentially increase safe-haven flows despite his claims to end conflicts worldwide in a matter of days,” Monfort said.
Copper falls on strong dollar
Copper prices on LME fell on Friday, and were set for a fourth consecutive week of losses.
A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies, limiting demand.
Copper traders were also doubtful if China’s latest stimulus measures could prop up demand for the red-metal in one of the top consumers.
A meeting of China’s National People’s Congress, which was supposed to provide more cues on stimulus measures, has been delayed till November from late-October, according to a Reuters report.
At the time of writing, the three-month copper contract on LME was at $9,533.50 per ton, down 0.4% from the previous close.
Palladium extends gains
Futures contracts of palladium rose for the second-consecutive trading day on Friday as risks to supply boosted sentiments in the market.
According to informed sources, the US government is set to call on the rest of the G7 to impose sanctions on Russian palladium.
This has been supporting the upswing in prices.
The palladium contract on the New York Mercantile Exchange jumped 9% at times on Thursday to reach its highest level since December last year. At present, prices were 0.4% higher at $1,168 per ounce.
Russia has a dominant position in the palladium market, with one company supplying 40% of the world’s mine supply, according to Commerzbank AG.
Barbara Lambrecht, commodity analyst at Commerzbank, said in a note:
The EU, which imports about half of its palladium, obtained about a third of its imports from Russia in 2021.
The share is likely to have declined, but is likely to remain significant.
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