Investing.com - Gold futures inched up modestly on Friday, but still posted the worst monthly performance in more than two years in July, as ongoing expectations that the Federal Reserve will hike interest rates at its September policy meeting weighed.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $1,079.20 a troy ounce on Friday before recovering to end the session at $1,095.10, up $6.40, or 0.59%, for the day.
For the week, prices of the precious metal tacked on $3.10, or 0.84%, the first weekly gain in six weeks, as investors returned to the market to seek cheap valuations in wake of recent losses.
In July, gold prices lost $79.50, or 6.72%, the biggest weekly decline since June 2013. Futures fell to a five-and-a-half year low of $1,072.30 on July 24.
Gold has been under heavy selling pressure in recent weeks amid speculation the Fed will raise interest rates for the first time in nine years in the coming months.
The central bank sounded more upbeat about the economy following its policy meeting last week, leaving the door open for an interest-rate hike as soon as September.
In its rate statement published Wednesday, the Fed described the economy as expanding "moderately," while upgrading its view of the labor and housing markets.
The central bank gave no clear indication of the timing of the next rate hike, but left itself room to act as early as September, citing "solid" gains in the job market and "additional" improvement in the housing sector.
The Commerce Department said on Thursday that the economy grew 2.3% in the second quarter, missing expectations for growth of 2.6%, but improving from growth of 0.6% in the preceding quarter.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Also on the Comex, silver futures for September delivery rose 4.9 cents, or 0.33%, on Friday to settle at $14.74 a troy ounce by close of trade.
On the week, silver prices tacked on 5.5 cents, or 1.77%, snapping a five-week losing streak. However, futures still ended July down 87.0 cents, or 5.37%.
Elsewhere in metals trading, copper for September delivery shed 1.3 cents, or 0.57%, on Friday to settle at $2.363 a pound after hitting a session low of $2.348. Prices fell to a six-year low of $2.336 on July 27.
For the week, copper prices declined 2.0 cents, or 0.76%, the fifth consecutive weekly loss. Prices of the red metal plunged 25.1 cents, or 9.6%, in July, as steep declines on China's stock market rattled investors' confidence.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.32 late Friday, paring the week’s gains to 0.1%.
The dollar index rose 1.86% in July, boosted by expectations that the Federal Reserve could raise rates as soon as September if the economy continues to improve as expected.
In the week ahead, investors will be focusing on Friday's nonfarm payrolls report for July, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.
Market participants will also be awaiting surveys of manufacturing and service sector data from the U.S., the U.K. and China.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 3
China is to release revised data on manufacturing activity.
The U.K. is to publish its manufacturing index.
The U.S. is to release data on personal income and expenditure, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, August 4
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
The U.S. is to report on factory orders.
Wednesday, August 5
China is to release a report on service sector activity.
The U.K. is to release its closely watched report on service sector activity.
The U.S. is to release the ADP report on private sector hiring, while the ISM is to release data on service sector activity.
Thursday, August 6
The U.K. is to publish a report on industrial production. Later in the day, the Bank of England is to announce its benchmark interest rate and publish its quarterly inflation report. Governor Mark Carney is to hold a press conference about the report.
The U.S. is to release its weekly government report on initial jobless claims.
Friday, August 7
The Bank of Japan is to announce its benchmark interest rate and publish its rate statement. There will be a closely watched press conference following the rate announcement.
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls.