Gold price edges back, but on track for 3rd straight weekly gain

Silver prices aim for best weekly gain in 6 weeks, FactSet data show

Gold prices on Friday were set to take a pause from a recent series of gains that have taken it to around a six-week high, but the precious metal was on pace for its third consecutive weekly advance.

Precious metals have been partly supported by central banks that have vowed to keep key interest rates lower for longer amid the COVID-19 pandemic and governments that have committed to printing more money to limit the economic damage wrought by the pandemic.

A persistent weakening of the the U.S. dollar, which appears set to produce two straight months of declines greater than 2%, has also bolstered the appeal of gold and silver. A weaker dollar can make precious metals priced in dollars more appealing to buyers using foreign currencies.

“The central bank seems committed, in theory, to keep rates lower for longer than it would in the past and that applies to purchases as well. That could continue to support the yellow metal, especially given the direction of travel for the dollar,” wrote Craig Erlam, senior market analyst at Oanda, in a research note.

February gold GCG21, -0.06% was trading $2.80, or 0.2%, lower at $1,887.60 an ounce, following a 1.7% gain on Thursday that pushed the metal to its highest finish since Nov. 6, according to FactSet data.

Gold got a boost Wednesday from the Federal Open Market Committee’s last policy update of 2020, when it emphasized its intention to keep interest rates pinned near 0% to at least 2023 and to keep buying bonds until the economy fully recovers from the viral pandemic.

Meanwhile, silver for March delivery SIH21, -0.39% shed 17 cents, or 0.7%, to trade at $26.02 an ounce, following 4.5% surge.

For the week, gold is on track for a weekly gain of 2.4%, while silver futures were looking at a weekly gain of around 8%, marking its best weekly rise in six weeks if gains hold, according to FactSet data based on the most-active contract.

Against that backdrop, congressional leaders in the U.S. are racing to hammer out a $900 billion coronavirus relief aid package to out-of-work Americans and businesses troubled by the COVID-19 pandemic. Lawmakers are scrambling to achieve a fiscal spending deal before federal funding lapses and the government faces a shutdown at 12:01 a.m. Saturday.

This article was originally posted by MarketWatch.