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It’s been a tough week for precious metals, whose safe haven appeal is slipping as the US dollar continues to gain strength.
Gold is on track this week for its biggest drop since late May, having fallen 2.4 percent. Meanwhile, the dollar index is set to achieve its best streak of gains since 1997; a strong dollar draws appeal away from safe-haven investments like gold.
“The market remains under pressure from expectations for a stronger U.S. currency in the longer run and with physical buyers still absent, unwilling to support prices on fresh lows,” VTB Capital analyst Andrey Kryuchenkov told Reuters. “The gold market sentiment is overwhelmingly bearish.”
US gold futures for delivery in December are down $2.80 per ounce, at $1,236.20, Reuters reported.
Like gold, silver has also incurred some losses this week. The white metal touched down today at an intraday low of $18.50 per ounce; however, it has since climbed slightly up to $18.59 per ounce. Overall, silver is down at a 14-month low and is on track for an eighth week of losses out of nine.
Copper prices on the London Metal Exchange today are flat at $6,835 per tonne, but still heading for their biggest weekly loss in two months, according to Reuters. The metal’s price has been dropping on the expectation that US interest rates will soon rise.
“Positive data on one hand will represent that consumers are confident about the strong growth in the U.S., which is a positive sign for the industrial metals but at the same time it increases the odds of an increase in the interest rate,” Naeem Aslam, chief market analyst at Ava Trade, told Reuters.
Meanwhile, copper futures for delivery in December on New York’s COMEX are up 0.1 percent, or $0.003, trading at $3.0965 per pound, Bloomberg reported.
Finally, Brent crude oil for October settlement is down $0.08, or 0.1 percent, trading at $98 a barrel, according to Bloomberg.
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