Investing.com - This week precious metal traders will continue to monitor movements in the U.S. dollar, one of the biggest factors for gold, with the greenback in turn taking its cue from expectations around the Federal Reserve’s monetary policy plans.
Tuesday’s data on U.S. producer price inflation will be closely watched and if figures indicate that inflationary pressures are cooling, there could be a further reprieve from concerns over the prospect of additional rate hikes in the coming months.
Gold is highly sensitive to rising interest rates, as these increase the opportunity cost of holding non-yielding bullion.
A number of Fed officials will also be speaking this week, giving them additional opportunities to reassure market watchers that they will take a patient approach towards monetary policy.
Gold prices were little changed late Friday, but notched up their fourth successive weekly gain.
Gold futures ended at $1,287.85 on the Comex division of the New York Mercantile Exchange late Friday, for a weekly gain of 0.29%.
The U.S. dollar pushed higher on Friday, even as the greenback’s outlook remained bleak amid cautious signals from the Fed about further rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, ended Friday up 0.14% at 95.25, but posted its fourth straight weekly decline.
A weaker dollar can be a positive for commodities priced in the U.S. currency, making them less expensive to buyers holding other currencies. Conversely, a stronger dollar can weigh on prices.
Fed Chairman Jerome Powell said on Thursday the U.S. central bank could be patient on rate policy.
Data on Friday showed U.S. consumer prices fell for the first time in nine months in December, which likely supports recent remarks by several policymakers, including Powell, for caution about raising interest rates this year.
"Recent inflation data from around the globe points to a tamer outlook on rising prices in the coming months," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.
"That should allow world central banks to be less hawkish on their monetary policies, which would be a bullish element for the precious metals markets."
Among other precious metals, silver futures ended the week at $15.6 an ounce to end the week down 0.82%, snapping three weeks of gains.
Copper was up 0.7% at $2.656 late Friday and gained 1.57% for the week.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, January 14
Financial markets in Japan will be closed for a holiday.
China is to release data on trade and direct foreign investment.
New Zealand is to release a report on business confidence.
Tuesday, January 15
In the UK, parliament members are due to hold a second attempt to vote on Prime Minister Theresa May’s Brexit deal.
European Central Bank President Mario Draghi is due to speak at an event in Strasbourg.
The U.S. is to release figures on producer price inflation and the Empire manufacturing index is also on tap.
Kansas City Fed President Esther George is to speak.
Wednesday, January 16
Australia is to release data on consumer sentiment.
Bank of England Governor Mark Carney is due to testify, along with other policymakers, on the Financial Stability Report before the Treasury Select Committee.
The UK is to release producer price inflation data.
Thursday, January 17
Central bankers and finance ministers from the G20 nations are to hold a summit meeting in Tokyo.
Bank of Japan Governor Haruhiko Kuroda is due to speak at the G20 summit.
The euro zone is to publish revised inflation figures.
The U.S. is to publish the weekly report on initial jobless claims as well as the Philly Fed manufacturing index.
Fed Governor Randal Quarles is to speak.
Friday, January 18
The G20 summit is to continue for a second day.
The UK is to release data on retail sales.
Canada is to release inflation figures.
New York Fed President John Williams is to speak.
The U.S. is to close out the week with preliminary data on consumer sentiment.
-- Reuters contributed to this report