Investing.com - Gold prices rose for a sixth straight session on Friday, to notch up the largest weekly gain in two months as the U.S. dollar slid to its lowest level in more than a year, underpinning demand for the precious metal.
Gold for August delivery closed up 0.72% at $1,254.48 on the Comex division of the New York Mercantile Exchange. For the week, the precious metal was up 1.97%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended down 0.32% at 93.78, the lowest close since June 22, 2016.
The index ended the week down 1.32%, marking its second straight weekly decline.
A weaker dollar tends to boost prices for gold, which is denominated in the U.S. currency.
The greenback was pressured lower by the stronger euro, which was boosted by expectations that the European Central Bank is moving closer to tapering its bond-buying program and fresh political turmoil in Washington.
On Thursday, Bloomberg reported that the investigation into alleged links between President Donald Trump’s campaign and Russia in last year’s election is extending into his business.
Earlier in the week, Republican lawmakers pulled the plug on the latest version of a contentious bill to replace Obamacare, delivering a major policy blow to the Trump administration.
The failure to deliver on healthcare reform indicated that Trump’s other legislative efforts, such as overhauling the tax code and implementing fiscal stimulus could face difficulties.
Hopes for tax reforms and fiscal stimulus under the Trump administration helped drive the dollar to a 14-year high after the November election. The dollar has now given up all of its post-election gains.
Doubts over the Federal Reserve’s plans for a third rate hike this year have also fed into dollar weakness. The Fed is to hold its next meeting on Wednesday and is widely expected to hold policy steady.
Elsewhere in precious metals trading, silver rose 0.92% to $16.49 a troy ounce late Friday, while copper was up 0.33% to $2.725 a pound
Platinum rose 0.49% to $937.8 a troy ounce, while palladium was down 0.42% to $844.03 a troy ounce.
In the week ahead, investors will be awaiting the outcome of Wednesday’s Fed meeting, ahead of data on Friday which will give the first look at U.S. second quarter growth.
Survey data from the euro zone on Monday will help gauge the strength of the ongoing recovery in the euro area. The UK is to release data on second quarter growth on Wednesday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.