Weekly Round-Up: Gold Enters Bull Market Territory

Base Metals
Copper Investing

The gold price reached its highest point in over a year on Friday. Silver and copper also fared well this week, as did oil.

The gold price climbed this week, peaking Friday at $1,271.76 per ounce. That’s its highest level since February 2015. 
While that’s great news for gold bugs, what’s perhaps more interesting is that it’s not just this week that’s been positive for the yellow metal. In fact, according to the Financial Times, gold is currently enjoying its best start to the year since 1980. What’s more, it’s risen 21.8 percent since its December low, meaning that it’s in bull market territory for the first time since 2013.
In terms of what’s driving the gold price, one analyst aptly told Kitco that an “explosive cocktail” of factors are pushing the metal up. However, at the moment, it seems like investor buying is its main driver — data from Bank of America Merrill Lynch shows that gold funds are seeing their biggest inflows in seven years, with $7.9 billion entering such funds in the last four weeks.

Encouragingly, many market watchers think that gold’s momentum will continue. Notably, Kitco quotes Bart Melek, head of commodity strategy at TD Securities, as saying that gold looks set to hit his firm’s Q1 price target of $1,300. “There are many reasons to think that gold will rally to $1,300,” he said.
For its part, the silver price also climbed this week, and peaked Friday at 11:00 a.m. EST at $15.74 per ounce.
On the base metals side, Reuters states that benchmark LME copper rose 3.5 percent on Friday to close at $5,027 per tonne. Prior to that it hit $5,059, its highest level since last November. Overall, benchmark LME copper has made a weekly gain of 7 percent, its largest since December 2011.
Explaining copper’s positive performance, one trader told Reuters that a lower US dollar (caused by strong US jobs data released Friday) prompted “a scramble by funds to buy copper and triggered pre-set buy orders after copper broke through key levels.” He added, “[u]pside momentum is keeping the buy signal going. It’s nearly all fund buying — both short-covering and fresh longs.”
Oil prices were also pushed up by Friday’s US jobs data, with Brent futures rising $1.58 to reach $38.65 per barrel at 1:49 p.m. EST. According to another Reuters article, Brent futures are set to make an impressive weekly gain of about 10 percent. Meanwhile, US crude futures were up $1.29, at $35.88; similarly, they’re set to make a weekly gain of about 9 percent.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
Related reading: 
Weekly Round-Up: Buy Gold Now, Says Deutsche Bank
Weekly Round-Up: Gold Price Still Has Momentum
Weekly Round-Up: Gold Makes a Comeback
Weekly Round-Up: Gold, Silver Hit Highest in 3.5 Months
Weekly Round-Up: Gold to Make Biggest Monthly Gain in a Year?
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