Metals Stocks: Gold logs highest settlement since July, with biggest weekly gain since August

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Markets/commodities reporter

Deputy markets editor

Gold futures settled Friday at their highest since July, logging their biggest weekly gain since August following market turmoil that sent stocks reeling and pressured Treasury yields and the U.S. dollar.

Gold for February delivery GCG9, +0.96%  on Comex rose $9, or 0.7%, to settle at $1,252.60 an ounce. For the week, gold was up 2.2%, which was the biggest such gain since a 2.5% rise in the week ended Aug. 24, according to FactSet data. Gold also settled at its highest since July 10, trimming its year-to-date loss to less than 5%.

Gold prices rose “in the wake of a U.S. jobs report that did not meet market expectations on the key jobs-growth component,” said Jim Wyckoff, senior analyst at Kitco.com, in a daily note.

“What is arguably the most important U.S. economic report of the month, the Labor Department employment situation report for November, saw the key non-farm jobs number come in at up 155,000, which was well below the consensus forecast of up 198,000,” he said.

“This report leans slightly in favor of the U.S. monetary policy doves who would prefer the Federal Reserve tighten money policy at a slower pace,” he said.

U.S. stocks tumbled sharply on Thursday, and again saw sizable losses Friday as gold futures settled. The ICE U.S. Dollar Index DXY, -0.23% a measure of the currency against a basket of six major rivals, was down 0.2% Friday, on pace for a 0.6% weekly decline, while the yield on the 10-year Treasury note TMUBMUSD10Y, -1.01%  rebounded slightly a three-month low to trade at 2.867%.

A weaker dollar can boost commodities priced in the greenback as it makes it cheaper to users of other currencies. Lower bond yields can also be a positive for commodities, which don’t offer a yield.

In other metals trade, March silver SIH9, +1.49%  gained 1.3% to $14.696 an ounce. It was up roughly 3.4% for the week, but has still lost more than 14% year to date.

“U.S. investment interest in the precious metals has been lackluster this year due to high consumer confidence, a generally strong U.S. economy, firm stocks (until recently) and a strong dollar,” said Peter Grant, vice president of precious metals at Zaner Metals.

However, he believe that silver prices are “a bargain at these levels.” The gold/silver ratio, meaning how many ounces of silver it would take to buy an ounce of gold, was at 85 Friday, which Grant said makes silver “historically cheap relative to gold.”

Read: Silver’s primed to take the spotlight from its metal peers

January platinum PLF9, +0.54%  added 0.1%, to $790.40 an ounce, to tally a loss of about 1.2% for the week, while March palladium PAH9, +2.31%  rose 2.5%, to $1,170.80 an ounce—up 2.3% from a week ago.

March copper HGH9, +0.49%  rose 0.6%, to $2.76 a pound—down about 1% for the week.

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