‘Tamer’ U.S. inflation data and fall in ISM manufacturing index help give the metal a boost Gold futures settled at their highest on record Friday, as weakness in some U.S. economic data helped pull the dollar and Treasury yields lower, boosting the precious metal’s investment appeal.

The “golden rally” witnessed Friday ”isn’t just a flash in the pan, it’s the main course in a feast of market dynamics, seasoned with a dash of uncertainty and a pinch of speculation,” said Adam Koos, president at Libertas Wealth management Group.

At the heart of this ascent to a record settlement is a “complex recipe” made of U.S. economic data, the “fluctuating” fortunes of the dollar, the “ebb and flow” of bond yields and the Federal Reserve’s monetary maneuvers, Koos told MarketWatch. Each of these ingredients adds its own ”unique flavor to the pot.”

Gold for April delivery GCJ24, +1.88% GC00, +1.88% climbed $41, or 2%, to settle at a record $2,095.70 an ounce on Comex on Friday. The day’s settlement topped the previous record high for a most-active contract from Dec. 27 at $2,093.10, according to Dow Jones Market Data.  

Prices traded as high as $2,096.40 Friday, holding below the intraday record high of $2,152.30 from Dec. 4.

The yellow metal found support Friday following some “tamer” U.S. inflation data, and by “friendly outside markets” — a slightly weaker U.S. dollar index and higher crude-oil prices, said Jim Wyckoff, senior analyst at Kitco.com, in daily commentary.

On Thursday, U.S. government data showed that the PCE index rose 0.3% in January, matching the forecasts of economists polled by The Wall Street Journal, while the yearly rate of inflation fell to 2.4% from 2.6%.

Data on Friday, meanwhile, revealed that the Institute for Supply Management’s index of manufacturers declined to 47.8% in February from 49.1% in January. Economists polled by the Wall Street Journal had predicted an ISM reading of 49.5%.

Against that backdrop, the U.S. dollar has weakened, with the ICE U.S. Dollar index DXY down 0.3% at 103.88 in Friday dealings. Treasurys have climbed, prompting the yield on the 10-year Treasury BX:TMUBMUSD10Y to fall to 4.200% from 4.644% on Thursday. Yields move in the opposite direction to prices.

Gold has had a very interesting set up in recent weeks, with “strong Asian buying, primarily from China, adding to continued central bank purchases to keep the gold price firmly above $2,000,” Brien Lundin, editor at Gold Newsletter, told MarketWatch.