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.
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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