Weekly Round-Up: Gold Price Hits Five-year Low

The gold price hit a five-year low on Friday morning, breaking through the low of $1,130.20 per ounce it hit in November to reach $1,129.80. 
Though the news came after China disclosed its gold reserves for the first time in six years, so far market watchers don’t seem to be blaming gold’s price drop on that news. Bloomberg states that while the Asian nation now holds 53.31 million troy ounces of gold — up 57 percent from its last estimate — “the gain was much less than some had reckoned.”
Elaborating, Mark O’Byrne, executive director of Dublin’s GoldCore, told the news outlet, “[p]eople were expecting that they have bought a lot more. That’s why we haven’t seen much of a movement so far today. The big question is whether they now continue buying.”
So what factors did move the gold price this week?
Like China’s gold reserves announcement, Greece failed to provide momentum this week despite expectations to the contrary. However, comments released Thursday from US Federal Reserve Chair Janet Yellen did exert pressure on the gold price — she reiterated that US interest rates will likely increase in 2015, and the news bumped down gold, as well as silver, platinum and palladium.
The Wall Street Journal notes that the platinum price slumped to its lowest level in over six years, while the palladium price sunk to its lowest point in two and a half years. For its part, the silver price was sitting at $14.88 per ounce as of 12:30 p.m. EST Friday.
On the base metals side, Reuters states that copper gained Thursday after Greece approved a bailout deal struck with Eurozone officials on Monday. Stabilization in China’s stock market, which took a big hit last week, also helped the red metal.
However, copper’s good fortune was not to last — on Friday, COMEX copper for September delivery was down 1 percent, at $2.4975 per pound, on the back of “jitters about future demand from China,” as per NASDAQ. China is the world’s biggest consumer of copper, meaning that even small pieces of news out of the country often rock investors’ opinions.
Finally, the oil price fell Friday, The Wall Street Journal said in another article. Light, sweet crude on the NYMEX was down 1.2 percent, at $50.30 per barrel, while Brent crude was down 0.4 percent, at $56.61, on the ICE Futures Europe.
Prices for the fuel were driven down by concerns about “a growing oversupply of oil” and incoming US drilling data. News of a landmark deal regarding the future of Iran’s nuclear programs likely also provided little support for oil prices this week. If passed, the deal will allow the country to increase its oil exports in an already oversupplied market.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
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