Weekly Round-Up: Gold Price Falls on US Tax Reform Hopes

The gold price edged lower on Friday after the US Senate approved a budget blueprint and investors turned to riskier assets.

gold price silver copper oil

The gold price fell on Friday (October 20) after the US Senate approved a budget blueprint that clears the way for tax reforms.

The US dollar rallied along with stocks and bond yields, and investors turned to riskier assets, putting pressure on precious metals. Overall, gold lost 1.7 percent this week and was trading below the $1,300-per-ounce mark after closing at that level last Friday (October 13).

“This has certainly been another interesting week for gold,” said Lukman Otunuga, a research analyst at FXTM. “The metal has steadily depreciated in recent days, despite geopolitical tensions and political uncertainty supporting the flight to safety.”

“There is a suspicion that the culprit behind gold’s selloff may be renewed optimism over Donald Trump’s tax reforms,” he added. As of 1:00 p.m. EST on Friday, the gold price was at $1,280.17. Click here to find out more about what happened to gold in Q3 and what’s ahead in Q4.

Looking over to silver, the white metal was on track to fall 1 percent this week, trading lower earlier on Friday due to the same factors as gold. As of 1:00 p.m. EST, the white metal was at $17.07 per ounce. Click here to find out more about where silver is going in the last few months of the year.

Palladium was up 1.7 percent on Friday, trading at $975 per ounce, while platinum was flat, sitting at $921.20 per ounce.

On the base metals side, LME copper ended the week down 0.2 percent, at $6,952 a tonne, having rallied above $7,000 at the start of the week for the first time since September 2014.

Lastly, spot oil edged higher on Friday and was on track to end the week unchanged. Traders expect OPEC to be able to balance the market despite US shale production increasing.

November West Texas Intermediate crude rose 0.3 percent on the New York Mercantile Exchange, to $51.46 a barrel, while Brent crude for December delivery on London’s ICE Futures exchange was up 0.6 percent, at $57.56 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.

Weekly Round-Up: Gold Price Breaks $1,300

By Charlotte McLeod, October 13, 2017

Gold avoided bad Friday the 13 luck to break the $1,300-per-ounce mark in mid-morning trading. 

As of 9:30 a.m. EST on Friday (October 13), the yellow metal was changing hands at $1,301.30. According to MarketWatch, gold was buoyed by a cooler-than-expected reading on US inflation. The data left investors uncertain about the pace of future rate hikes from the US Federal Reserve.

“There are many triggers for gold, including the mix of economic data showing uncertainty of future growth to inflation, which would push the [Federal Reserve] to raise rates in a slower sequence,” Peter Spina, president and CEO of GoldSeek.com, told the news outlet.

Market watchers are currently pricing in an 82-percent chance of a December rate hike from the Fed, Reuters says. That’s down from 87 percent before the release of Friday’s inflation data. Higher interest rates tend to put pressure on gold because they push bond yields higher and boost the dollar.

Against that backdrop, the gold price is also receiving support from geopolitical factors. US President Donald Trump announced in a speech Friday morning that his administration “cannot and will not” certify that Iran is compliance with its 2015 nuclear agreement with a group of world powers. Trump also laid out his plans for dealing with the country moving forward.

As of 1:16 p.m. EST on Friday gold was sitting at $1,301.10, heading toward its first positive weekly close in five weeks. Silver, which tends to mirror gold’s price movement, was at $17.31 per ounce at that time.

On the base metals side, copper prices hit their highest level in four weeks on Tuesday (October 10). In another article, Reuters notes that the gain came “as speculators kept buying in response to expectations of potential shortages in China.” The red metal closed up 1.4 percent at $6,760 per tonne that day.

“I think copper’s pricing in expectations of the Chinese restrictions on scrap imports, but to me the price looks a little high based on current fundamentals,” said Colin Hamilton of BMO Capital Markets.

Finally, oil prices rose on Friday due to a number of factors, including uncertainty about the impact of Trump’s comments on Iran and higher Chinese imports in September. As of 12:09 p.m. EST on Friday, WTI crude was up 1.48 percent, at $51.35 per barrel, while Brent crude was up 1.55 percent, at $57.12.

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

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

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