Gold suffers biggest weekly loss in 2 months

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By Myra P. Saefong and Mark DeCambre, MarketWatch

Gold loses 1.6% for the week

Gold futures declined on Friday to suffer from their largest weekly loss in two months, as investors eyed volatilityin global stocks and a leading dollar index aimed for its best weekly performance in more than a year.

April gold gave up $3.30, or 0.3%, to settle at $1,315.70 an ounce after tapping a high of $1,325. It finishedThursday in the green (http://www.marketwatch.com/story/gold-prices-threaten-to-mark-longest-skid-in-7-months-2018-02-08), halting a four-session skid as investors bought assets perceived as havens amid an equity rout that saw the DowJones Industrial Average and S&P 500 retreat into correction territory (http://www.marketwatch.com/story/dow-poised-to-edge-up-as-traders-lick-their-wounds-after-a-punishing-stretch-2018-02-08), defined as a drop of at least 10% from arecent peak.

Gold futures logged a weekly decline of about 1.6%, the largest since the week ended Dec. 8, according to FactSetdata.

March silver shed 20.2 cents, or 1.2%, to $16.139 an ounce, for a loss of 3.4% on the week.

"Panic selling has taken over in equities, and gold is up modestly from where it was earlier in the day," said JeffWright, chief investment officer at Wolfpack Capital. Gold futures traded as low as $1,313.20 during the session.

Gold appeared unfazed by the passage of the U.S. budget deal (http://www.marketwatch.com/story/senate-passes-budget-deal-as-government-remains-shut-down-2018-02-09) after a brief shutdown overnight.

"It is becoming increasingly clear that the yellow metal remains pressured by a stabilizing dollar and risingexpectations of higher U.S. interest rates," said Lukman Otunuga, research analyst at FXTM, in a note. "Investors wouldusually expect gold to benefit from increased stock market volatility, but this has so far not been the case."

U.S. stocks wavered between losses and gains in Friday trading, (http://www.marketwatch.com/story/us-stock-futures-rise-as-dow-faces-worst-week-since-the-global-financial-crisis-2018-02-09) with the Dow Jones Industrial Average movinglower as gold prices settled, then rebounding shortly after.

"If speculation continues to increase over developed central banks increasing respective interest rates, gold is atrisk to further selling pressure," Otunuga said.

The U.S. dollar (http://www.marketwatch.com/story/dollar-on-track-for-best-week-since-october-despite-global-market-jitters-2018-02-09) edged up Friday, with the ICE U.S. Dollar Index , a measure of greenback against a half-dozenrivals, adding 0.2% Friday, set for a 1.4% weekly advance--which would be its strongest weekly rise in more than a year.A stronger buck can undercut appetite for dollar-pegged assets, making them more expensive for those buying with weakermonetary units.

George Milling-Stanley, head of gold investment strategy at State Street Global Advisors, told MarketWatch that someof the early selling in gold this week came as trades were unwound.

"It was really about margin call selling. Investors sold some of their gold holdings to meet some of their margincalls on leveraged equities," Milling-Stanley said. The gold enthusiast believes that gold maintaining a level above $1,300 is a bullish sign.

In exchange-traded products, the exchange-traded, the SPDR Gold Shares (GLD) traded down 0.1%, while the silver-focused iShares Silver Trust(SLV) shed 0.8%.

Among other metals, March copper ended at $3.034 a pound, down 1.6%, with prices down about 4.8% on the week. Aprilplatinum lost 1.7% to $961.50 an ounce, for a weekly loss of 3.8%, while March palladium added 0.1% to $963.35 anounce, down about 7.8% for the week. It settled Thursday at its lowest since October.

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com