Gold steadied near seven-week highs at the close on Friday, while the dollar and yields weakened, despite a report showing US producer prices in June were slightly firmer than expected.
Comex gold for August delivery was last seen down 0.24% to $2,416 an ounce at the close. This followed a day when gold rose to its highest level since May 22, after the United States reported its Consumer Price Index (CPI) rose less than expected in June.
The front month Comex gold ended just over $2,399 an ounce, down $15 an ounce on the day.
"Gold surged past $2,400 an ounce, nearing the record high set in May, and climbed by as much as 2.3% following softer-than-expected CPI data, which showed a 0.1% monthly decrease in consumer prices—the first negative reading in over four years," Saxo Bank noted on Friday. "This fueled optimism that the Federal Reserve might soon start lowering interest rates."
Optimism over slowing inflation was tempered on Friday after June's producer price data showed a 0.2% increase, unchanged from May and above expectations for a 0.1% rise. Excluding volatile items, core PPI rose 0.4% in June after stagnating in May, while expectations called for a 0.2% increase.
The report failed to support the dollar, which sagged on Thursday after the CPI data. The US dollar index was down 0.33 points to 104.11. The Aussie dollar ended around 67.66 cents, down for the day but up 0.25% for the week.
US Treasury yields also continued to weaken. The two-year note was around 4.4640%, down 3.4 basis points and the lowest since March 8, while the yield on the 10-year note was down 3 basis points to 4.187%, the lowest since early March as well.
Comex silver fell heavily, dropping 2% on Friday (and 1.6% for the week) to finish at $31.075 an ounce.
Comex copper lost 1.86% for the week but gained 1.66% on Friday to close at $4.58 a pound, despite a decrease in copper metal imports into China in May.
