Gold futures closed with strong gains Friday, rising as the dollar traded lower against a basket of its major foreign-exchange counterparts. Platinum Gained.
Gold for April delivery surged $12.30 at $922.30 an ounce on the New York Mercantile Exchange. The contract gained $8.80 on the week from last Friday's closing level of $913.50.
Platinum for April delivery soared $32.60 to end at $1,884 an ounce, a new record closing high. The precious metal hit an intraday high of $1,884.90.
Commodities seem to have the potential to outperform other asset classes in an economic downturn, and that might be the biggest power shift of all, Barclays Capital said in a commentary.
On Thursday, gold futures moved $5 an ounce higher, extending a surge of $14.70 an ounce, or 1.6%, on Wednesday.
Despite rising volatility, the price outlook for gold remains positive, said commodity analysts at Credit Suisse, in a research note Friday. The physical supply/demand balance for the metal is tightening, as mine supply is falling, particularly in South Africa.
The sliding dollar and rallying commodities prices are putting Fed policymakers in a awkward situation as they plan to consider another rate cut at next months meeting.
The dollar index, which tracks the value of the greenback against a basket of other major currencies, has remained low as the Fed cut short-term rates during the year. The DX declined 0.3 percent to 76.655. The rate cuts lower the value of dollar-denominated assets and weaken the dollar.
A weak U.S. currency creates export advantages for buyers using foreign exchange to purchase dollar-denominated commodities. The opposite is true when the dollar rebounds.
Futures of platinum, which struck record highs in seven out of the last eight sessions, reached a new high that was $15 short of $1,900 an ounce.