Metals Stocks: Gold gains ground, but stays on track for second weekly decline

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Gold futures rose Friday, finding support after indiscriminate selling across financial markets weighed even on some traditional havens, but prices for the precious metal remained on track for a weekly loss.

For now, gold has gotten a boost from Senate Majority Leader Mitch McConnell’s proposal to get “needed relief cash in hands of middle and low income households, and other stimulus measures moving forward,” said Jeff Wright, executive vice president of GoldMining Inc.

“This has at least temporarily stemmed the tide of liquidation selling of all assets, gold no exception,” he told MarketWatch. “All signs point to gold moving higher in near term, unless panic selling wave returns.”

The ICE U.S. Dollar index DXY, -0.55% pull back is also supportive for gold, Wright said. “All signs point to gold moving higher in near term, unless [the] panic selling wave returns.”

Gold for April delivery GCJ20, +1.19%  on Comex rose $17.20, or 1.2%, to $1,496.50 an ounce. For the week, prices for the most-active contract is looking at a loss of 1.3%. The previous week’s loss of more than 9% was the largest since September 2011.

May silver SIK20, +3.84%  was up 46.1 cents, or 3.8%, to $12.595 an ounce, poised for a weekly decline of 13%. Prices on Wednesday settled at the lowest since January 2009.

Read: Physical demand for silver spikes as prices drops to an 11-year low

Gold has “rebounded alongside the improvement in risk appetite, while falling for much of the week as central banks around the world threw the kitchen sink at the coronavirus,” said Craig Erlam, senior market analyst at Oanda, in a note.

“Their efforts are not in vain but we’re not seeing the surge in demand for gold that we’ve seen in the past when the market is flooded with liquidity. I feel there may be a lag effect, with investors still liquidating gold positions to fill holes elsewhere but only time will tell,” he said.

Meanwhile, benchmark U.S. stock indexes were mixed in Friday dealings, as a global equity rout appeared to pause as central banks rolled out additional stimulus measures and governments weighed fiscal responses.

Against that backdrop, May copper HGK20, -0.75%  traded at $2.1715 a pound, down 0.6% in Friday dealings, and trading 12% lower for the week. April platinum PLJ20, +3.03%  tacked on 3.6% to $617.50 an ounce, with prices down about 16% for the week, but June palladium PAM20, -0.10%  edged down 0.05% to $1,528.70 an ounce, on track for a weekly rise of 1.7%.

“Fundamentally, gold should be in $1,500-1,600 range, and moving higher based on FOMC balance sheet expansion, stimulus measures and traditional retention of safe haven status,” said Wright. “Weekend of calm and quiet will be welcome for everyone in the market long and shorts and public in general.”

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