Investing.com - Gold prices ended lower on Friday but remained in sight of the previous day’s 17-month peak as the U.S. dollar was pressured by data pointing to slower U.S. economic growth and comments by a senior U.S. official backing a weaker currency.
Gold futures for February delivery settled down 1.06% at $1,348.40 on the Comex division of the New York Mercantile Exchange.
For the week, gold prices were up 1.43% after rising as high as $1,365.40 on Thursday, the strongest level since August 2016.
The dollar remained lower after data on Friday showing that the U.S. economy grew by an annualized 2.6% in the fourth quarter, rather than the 3% expected, down from 3.2% in the previous three months.
The greenback had already weakened broadly, falling to three year lows against a currency basket after U.S. Treasury Secretary Steven Mnuchin said on Wednesday at Davos that a “weaker dollar is good for trade.”
The dollar found some support after President Donald Trump said Thursday the U.S. currency would get “stronger,” appearing to contradict Mnuchin’s comments.
Trump added that he thought the remarks by his Treasury secretary had been taken out of context by investors.
Mnuchin’s comments were seen by markets as a departure from traditional U.S. currency policy. The risk of a weaker dollar is that it could undermine confidence in a wide swath of U.S. assets, including the U.S. Treasury market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.36% at 88.87 late Friday.
For the week, the index was down 1.64%, its largest weekly percentage decline since June.
A dollar-denominated commodity, gold becomes cheaper for overseas buyers when the U.S. currency weakens.
Elsewhere in metals trading, silver was down 1.31% at $17.38 a troy ounce late Friday, but ended the week with gains of 2.11%, the strongest weekly gainer among precious metals.
Platinum was down 1.81% at $1,013.40 to end the week 0.32% lower, while palladium was down 1.03% to $1,086.15. Palladium posed a second consecutive weekly decline after hitting record highs on January 15.
Among base metals, copper ended Friday down 0.51% at $3.200 a pound. The industrial metal has declined since hitting almost four year highs late last month boosted by a favorable global demand outlook, with some analysts questioning how much higher prices can go following a rapid rise in the past six months.
In the coming week, investors will be focusing on the upcoming Federal Reserve meeting, the last under the leadership of Janet Yellen before she hands the chairmanship over to Jerome Powell.