Weekly Round-Up: Gold Hits One-week High on Geopolitical Concerns

The gold price edged up on Friday (June 23), as political uncertainty hit the market again. The metalclimbed to a one-week high, supported by worriesabout US President Donald Trump, North Korea’s rocket engine testing and Brexit negotiations.

Despite itspositive performance, gold’s price gains were somewhat limited by increasing concernthat the US Federal Reservewill raise interest rates again later this year. Last week, the Fed decided to hike rates by a quarter point, a move that was highly expected by the markets.

Political noise out of Washington regarding Trump’s ties with Russia is unlikely to provide lasting support to gold while an escalation of the geopolitical tensions with North Korea is a bullish wild card, Julius Baer Gruppe (VTX:BAER) analysts said in a note.

Similarly,Danske Bank (CPH:DANSKE) analyst Jens Pederson commented, [t]he broad story is the tug of war between the Fed, which seems determined to push on with monetary tightening and reducing its balance sheet and political uncertainty.

A weaker dollar also helped the gold price this week, as a softer greenback makes commodities priced in US dollars cheaper for buyers using weaker currencies.As of 1:00 p.m. EST on Friday, the gold price was at $1,255.30 per ounce.

Looking over to silver, the metal wason track for itsfirst weekly gain in three weeks on Friday, also supported by a weaker US dollar and concerns about global stability.As of 1:00 p.m. EST on Friday, the white metal was changing hands at $16.68 per ounce.

Palladium was up 0.8 percent on Friday, trading at $877.2 per ounce. It is rapidlyclosing the price gap on platinum, whichwas up 0.3 percent for the week at$924.2 per ounce.

On the base metals side, the copper pricereached a two-and-a-half month high on Friday, supported by the rising Chinese stock market and strong European PMI data. LME copper closed up 1 percent, at $5,800 a tonne.

Lastly, spot oil rebounded from a tumultuous week on Friday, as some of the world’s largest producers expressed willingness to stick to output cuts, MarketWatch reported.August West Texas Intermediate crude gained 18 cents, or 0.4 percent, to reach $42.92 a barrel on the NYMEX, while Brent crude for August delivery on London’s ICE Futures exchange added 21 cents, or 0.5 percent, to hit $45.43 a barrel.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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By Priscila Barrera, June 16, 2017.

The gold price edged up on Friday (June 16) but was on track for a second weekly loss. The Federal Reserve decided to raise interest rates again by a quarter point earlier this week a move that was highly anticipated by the market.

The committee chose to raise rates again despite an economic slowdown at the start of 2017, which it predicts will be temporary.

Gold has been spooked by the hawkish tone from the Fed, which triggered some long liquidation both in futures and exchange-traded funds, said Saxo Bank analyst Ole Hansen.

Precious metals prices often drop with rising interest rates as some investors back away from the metal because it doesn’t pay interest.

Price action in both gold and silver of late seems to imply that traders still have plenty of short-term long positioning on their books, said OANDA analyst Jeffrey Halley. It may leaveboth metals vulnerable to a further washout into the weekend.

The announcement of the rate increase also boosted the US dollar, making commodities priced in the greenback more expensive for holders of other currencies.

The Fed foresees one additional rate hike this year, unchanged from its previous forecast and in line with experts’ expectations.As of 1:00 p.m. EST on Friday, the gold price was $1,254.42 per ounce.

Looking over to silver, prices inched up on Friday but were also headed for a weekly decline after the Fed decision. The white metal is down more than 5 percent since reaching a high of $17.71 per ounce on June 6.

However, Peter Krauth, resource specialist for Money Map Press, predicts that the rate hike will help silver reach $22 by the end of 2017. As of 1:00 p.m. EST on Friday, the white metal was $16.70 per ounce.

Palladium was down 0.8 percent on Friday, trading at $862.75 per ounce. Platinum was up 0.1 percent for the week to $921 per ounce, after touching a one-month low on Thursday (June 15) at $913.50.

On the base metals side, copper steadied on Friday but was still on track for a weekly drop, its biggest since May following the increase in interest rates. Three-month copper on the London Metal Exchange was trading at $5,664.50 a tonne but down more than 2 percent over the week.

Lastly, spot oil rebounded from 2017 lows on Friday, but was on track for its fourth weekly loss, as supplies remain high despite OPEC’s efforts to curb production according to data released this week by the US Energy Information Administration (EIA).

On the New York Mercantile Exchange, July West Texas Intermediate crude rose 29 centsor 0.7 percent to $44.75 a barrel, while August Brent gained 41 cents, a 0.9 percent increase to $47.33 a barrel.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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This article is updated weekly. Please scroll to the top for the most recent information.

Weekly Round-Up: Gold Price Falls After Nearing $1,300

By Priscila Barrera, June 9, 2017.

The gold price fell for a third day on Friday (June 9) after nearing $1,300 per ounce earlier in the week.Unexpected UK election resultsknocked the pound and lifted the dollar index to its highest level since May.

A lot of the financial markets haven’t moved as much as you might have thought, Oxford Economics analyst Daniel Smith told Reuters. The dollar’s a little bit stronger, and that’s going to weigh on gold, he added. It’s not just about risk appetite, it’s about what people are thinking on the dollar.

The UK election failed to deliver a clear majority for Prime Minister Theresa May’s Conservative party just days before Brexit negotiations with the EU are set tobegin. As political uncertainty rose in Britain, the pound fell sharply, touching a seven-week low, while the US dollar rallied and hurt gold.

It seems like long liquidation on gold and it looks vulnerable to more setbacks, Phil Streible, senior market strategist at RJO Futures in Chicago, said toBloomberg.Gold has been such a great trade and there was so much optimism, but it just failed to breach through $1,300.

Investors are now turning their attention to the US Federal Reserve’s meetingnext week; if the central bank decides to raise interest rates, gold could face further headwinds.As of 1:00 p.m. EST on Friday, the gold price was at $1,268.20.

Looking over to silver, the white metal also fell for a third day on Friday and was on track for its first decline in four weeks.As of 1:00 p.m. EST on Friday, silverwas at $17.22 per ounce.

Palladium gained more than 7 percent on Friday, reaching $884.60 per ounce, its highest level in more than 16 years. Meanwhile, platinum was up 0.6 percent for the week, at $938.80 per ounce.

On the base metals side, copperhit a five-week high, supported by positive Chinese data and supply concerns. Three-month LME copper finished 1.3 percent higher, at $5,804 a tonne. Chinese trade data registered another surplus in May, it’s helped coax copper prices higher, said Kash Kamal, a commodities analyst at Sucden Financial.

Lastly, spot oil fell on Friday and was on track for a weekly loss of 4 percent. US inventories rose more than expected this week, offsettingefforts to cut global supplies. On the NYMEX, July West Texas Intermediate crude rose 2 cents, or 0.72 percent, to $45.66 a barrel, while August Brent crude lost 4 cents, or 0.1 percent, to end at $47.81 a barrel.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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