Investing.com - Gold prices posted their biggest one-day gain in six weeks on Friday, as market players sought refuge in the yellow metal amid steep declines in global stock markets. A batch of soft U.S. economic data and weakness in the U.S. dollar provided further support.
Gold for February delivery on the Comex division of the New York Mercantile Exchange jumped $17.10, or 1.59%, to close the week at $1,090.70 a troy ounce. It earlier rose by as much as 2.2% to a session high of $1,097.50.
Global stock markets plunged on Friday as oil prices collapsed further below the $30-level, adding to fears over the outlook for global growth.
China’s Shanghai Composite entered a bear market Friday, European equities ended sharply in the red, while Wall Street closed more than 2% lower after hitting a near 15-month low.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, shed 0.13% to close the week at 98.99, following the release of disappointing economic data.
U.S. retail sales, manufacturing activity and industrial production all fell short of market expectations, the latest indication that economic growth stalled in the fourth quarter.
The downbeat data could persuade the Federal Reserve to delay its next interest rate beyond the first quarter. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Despite Friday’s gains, gold prices lost $7.20, or 0.65%, on the week. Futures are still up almost 3% so far this year as safe-haven demand was boosted amid a global stock market rout, worries over the Chinese economy and heightened geopolitical tensions.
Also on the Comex, silver futures for March delivery tacked on 14.8 cents, or 1.08%, on Friday to settle at $13.89 a troy ounce. On the week, silver futures inched down 6.9 cents, or 0.16%.
Elsewhere in metals trading, copper for March delivery slumped 3.2 cents, or 1.64%, to settle the week at $1.943 a pound on Friday after sinking to $1.936 earlier in the session, a level not seen since March 2009.
For the week, Comex copper prices plunged 7.9 cents, or 3.9%, as an ongoing meltdown on China’s stock market rattled investor sentiment.
Copper is down nearly 8.5% in 2016 as investors slashed holdings of the red metal amid persistent worries over an economic slowdown in China. The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
In the week ahead, investors will continue to focus on economic reports out of China, with Tuesday’s closely-watched GDP report in the spotlight.
Meanwhile, market players will keep an eye on upcoming U.S. data on inflation, building permits and housing starts to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.