2.3% Weekly Gain

Gold futures climbed on Friday amid weakness in the U.S. dollar and several worse than expected U.S. economic reports.

The COMEX August contract closed higher by $8.50, or 0.5%, at $1,628.10 per ounce. In doing so, the yellow metal posted its sixth consecutive day of gains and extended its weekly advance to 2.3%. On a monthly and year-to-date basis, the most actively-traded gold futures contract is now up by 4.2% and 3.9%, respectively.

Silver futures rallied alongside gold on Friday, with the COMEX July contract finishing higher by $0.33, or 1.2%, at $28.74 per ounce. For the week, however, silver underperformed gold with just a 0.9% gain. In addition, silver is now up by 3.3% in June and by 2.9% in 2012.

In contrast to the metals, gold and silver shares were mixed in afternoon trading, with the Philadelphia Gold & Silver Index (XAU) oscillating between gains and losses near 163.71. For the week, the XAU remained higher by 1.0%.

Notable XAU components in the black on Friday were Harmony Gold (HMY), Kinross Gold (KGC), and Pan American Silver (PAAS). HMY rose by 2.1% to $10.45, KGC by 3.5% to $9.00, and PAAS by 0.7% to $18.38 per share.

Commenting on the gold market, Jeffrey Wright – a managing director at Global Hunter Securities – stated that the yellow metal is “pricing in a higher likelihood of further liquidity measures” by the Federal Reserve at next week’s Fed meeting, “either from a continuation of ‘Operation Twist’ or less certain, a QE3 effort.”

Wright went on to say that “If there are no hints or signals after the FOMC meeting next week followed by a press conference, gold will sell off sharply. I am looking for a signal of slight liquidity to support the U.S. economy and weak job numbers, and think additional efforts with the ‘Operation Twist’ is the compromise solution for the Fed.”

Among other precious metals, platinum futures inched lower by $0.40 to $1,487.20 per ounce, but posted a 4.4% weekly advance. Palladium dipped 0.7% to $630.40 per ounce, cutting its weekly gain to 3.0%.

Copper also moved higher on Friday, by 0.9% to $3.38 per pound. In doing so, the closely-followed cyclical commodity stretched its climb this week to 2.7%.