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

The gold price rose Friday after cooler-than-expected US inflation data and harsh words for Iran from US President Donald Trump.

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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.

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

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