Weekly Round-Up: Gold Price Hits $1,300 on Political Uncertainty

The gold price rose above the $1,300-per-ounce mark as geopolitical uncertainty boosted precious metals demand.

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Gold rose above the $1,300-per-ounce mark on Friday (August 18), hitting its highest level since last November on the back of increased worldwide geopolitical uncertainty.

On Thursday (August 17), a van plowed into crowds in one of Barcelona’s tourist venues, killing at least 13 people and injuring many others.

“There is clearly more for financial markets to be concerned about,” Danske Bank (CPH:DANSKE) analyst Jens Pedersen said. “That has led to a risk-off environment, and that’s supportive for gold.”

Concerns that US President Donald Trump will not be able to deliver on his legislative agenda also pushed the yellow metal higher.

“This week’s events may prove to be a defining moment for President Trump, as events in Charlottesville and what seems to be a widening division between the White House and the US business community puts a question mark over the President’s future,” Neil MacKinnon, an economist at VTB Capital in London, said in a report on Friday.

In addition, the gold price received a boost from a weaker US dollar, as a softer greenback makes commodities priced in dollars cheaper for investors using other currencies. As of 12:30 p.m. EST on Friday, the gold price was at $1,288.65.

Looking over to silver, the white metal edged higher on Friday after touching a two-month high of $17.25 per ounce. It was on track for a weekly gain, supported by the increasing geopolitical risk that drove investors to precious metals. As of 12:30 p.m. EST on Friday, the white metal was at $17.05.

Palladium was up 0.2 percent on Friday, trading at $927 per ounce, while platinum rose 1.2 percent to reach $974.80 per ounce. Palladium hit a 16-year high earlier in the week.

On the base metals side, copper prices hit their highest level in more than two years, fueled by forecasts of strong demand in top copper consumer China and falling inventories. On Friday, LME copper was trading at $6,490 a tonne after hitting $6,580 on Thursday.

Lastly, spot oil edged higher on Friday, but was headed for a third weekly loss due to a surge in US output.

September West Texas Intermediate crude rose 54 cents, or 1.2 percent, to reach $47.63 a barrel on the New York Mercantile Exchange, while Brent crude for October on London’s ICE Futures Exchange gained $1.15, or 2.3 percent, to hit $52.18 a barrel.

Don’t forget to follow us @INN_Resource for real-time news updates!

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


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

By Priscila Barrera, August 11, 2017.

The gold price rose on Friday (August 11), touching a two-month high as geopolitical tensions continued to grow. 

The aggressive exchange between the US and North Korea escalated during the week, driving investors away from risk and pushing gold near $1,300 per ounce. Most recently, US President Donald Trump issued a warning saying the US military is “locked and loaded” to deal with North Korea.

“There is a continuation of flight to the safe havens after remarks on Thursday evening from Trump about North Korea,” said Quantitative Commodity Research consultant Peter Fertig“It’s not very likely that these tensions will ease in the near future so the outlook seems supportive for gold.”

The gold price has also received support from data pointing to weaker US inflation, which could slow the pace of further US Federal Reserve interest rate hikes later this year.

“If you look at the gold price after the CPI (inflation) data, it tells you that the Fed is not going to be in any rush to increase the interest rate this year,” said Naeem Aslam, chief market analyst at Think Markets.

The CPI report also hit the US dollar, which touched a one-week low, boosting gold demand. A softer greenback makes commodities priced in dollars less expensive for buyers using weaker currencies.

“Gold remains in demand as a safe haven and is still on the up,” analysts at Commerzbank (OTMKTS:CRZBY) wrote in a note.

As of 1:00 p.m. EST on Friday, the gold price was at $1,287.14. Click here to read more about the gold price performance in Q2 and what’s ahead for the yellow metal.

Looking over to silver, the white metal edged higher on Friday, and was on track to hit a weekly gain of almost 5 percent. As of 1:00 p.m. EST on Friday, the white metal was at $17.08 per ounce. Click here to read more about the silver price performance in Q2.

Palladium was up 0.4 percent on Friday, trading at $899.80 per ounce, while platinum rose 1.1 percent to reach $987 per ounce.

On the base metals side, copper prices hit a fresh two-year high earlier this week, fueled by forecasts of strong demand in top copper consumer China and a weak dollar. On Friday, LME copper was trading at $6,417.50 a tonne.

Lastly, spot oil headed lower on Friday as reports of a rise in production increased oversupply concerns.

September West Texas Intermediate crude lost 22 cents, or 0.4 percent, to hit $48.35 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery on London’s ICE Futures Exchange lost 22 cents, or 0.4 percent, to reach $51.69 a barrel.

Don’t forget to follow us @INN_Resource for real-time news updates!

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

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