By 
Gold futures ended the week with a loss, but bullion scored a monthly gain, driven in part by buying on concerns about rising inflation around the world and an uneven recovery from the COVID-19 pandemic.
Sister metal silver also saw a loss for the week, along with its first monthly climb since May.
“The primary driver behind these gains is falling real [interest] rates, supported by a slightly weaker U.S. dollar,” said Jeff Klearman, portfolio manager at GraniteShares, which offers the GraniteShares Gold Trust
BAR,
-0.87%.
“Since late September, 10-year U.S. real rates have fallen almost 20 [basis points] to -1.01%, reflecting investor concerns of slowing economic growth, supporting gold and silver prices,” he said in emailed comments.
“Persistently high inflation caused by input/material shortages and production and shipping bottlenecks has increased investor concerns of slowing economic growth with rising prices,” said Klearman. Gold is often perceived to be a hedge against pricing pressures. “Sharply increasing energy prices, especially natural gas and coal prices, have exacerbated the situation,” he said.
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Against this backdrop, December gold
GCZ21,
-1.02%
GC00,
-1.02%
fell $18.70, or 1%, to settle at $1,783.90 an ounce, a more than one-week low. The precious metal, based on the most-active contract, saw a weekly decline of 0.7%, according to Dow Jones Market Ata, but was up 1.5% on the month — the strongest monthly advance since July.
Read: Third-quarter global gold investment falls by more than half year-on-year, new report finds
December silver
SIZ21,
-0.73%
SI00,
-0.73%
fell by 17 cents, or 0.7%, to settle at $23.949 a ounce. Prices for the metal notched the first monthly advance in five months, up 8.6% in October. For the week, silver ended down by about 2.1%.
Gold has been struggling to retain its grip on a perch above $1,800, a psychologically significant level that is now seen by some as resistance for the precious metal.
Movements in the U.S. dollar, which precious metals are priced in, have been blamed for the metal’s choppy, rangebound trade of late.
On Friday, the dollar, as measured by the ICE U.S. Dollar index
DXY,
+0.84%
was up 0.9% for the session, putting pressure on gold, though the index eyed a nearly 0.1% monthly loss.
The move for the dollar on Friday follows data from the U.S. Commerce Department, which showed consumer spending rose 0.6% in September while personal income slumped 1%.
The dollar extended its rise, and gold continued to move lower, after separate data revealed that the Chicago Business Barometer, also known as the Chicago PMI, rose to 68.4 in October from 64.7 in the prior month. It’s the strongest reading since July. Consumer sentiment, meanwhile, rose to 71.7 from a preliminary October reading of 71.4, according to a University of Michigan survey.
The price of gold has climbed to intraday highs above the $1,800 level, but “once again failed to move towards breakout levels,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a daily note. “The inability to make a sustained climb above the $1,850 area suggests a capped market that, for now, is still not ready to overcome a strong dollar,” the economist wrote.
“In the near term, we see the repeated movements of the year staying in place. In other words, a trading range without breaking down or up,” Cardillo wrote.
The Federal Reserve will issue its latest monetary policy decision on Wednesday.
“The Fed is cautiously moving toward tightening monetary policy,” said GraniteShares’ Klearman. “Concerned about current high levels of inflation, the Fed — expected to begin tapering its bond buyback program starting next month and perhaps raising rates by next June — is also concerned about the slowing economic growth.”
“This cautiousness, combined with concerns of reduced economic activity, has helped move real rates lower and will likely support gold and silver prices moving forward,” said Klearman.
Among other Comex metals, December copper
HGZ21,
-1.40%
lost 1.6% to $4.368 a pound, with prices up over 6.8% for the month. For the week, prices fell 2.9%.
January platinum
PLF22,
-0.14%
shed 0.3% to $1,020.70 an ounce, ending 6.1% higher for the month, but down 3% for the week. December palladium
PAZ21,
+0.23%
settled at $1,980.30 an ounce, down 0.5% on Friday. It posted a monthly rise of about 4.2%, but fell 2.7% for the week.
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