Precious Metals


The gold price has been driven mainly by geopolitical tensions and a weak US dollar in Q3, and looks set to end the period higher.

The gold price edged lower on Friday (September 29), but was on track for a quarterly gain. Geopolitical tensions and a weaker US dollar have been the metal’s main drivers over the last three months.
Gold was under pressure on Friday due to lower inflation and consumer data, which fueled expectations that the US Federal Reserve will hike interest rates in December. As of 1:00 p.m. EST, it was trading at $1,283.70 per ounce.
“A more hawkish shift in Fed policy expectations, good economic data, and optimism about tax reform are support[ing] the reflation argument, which is bad for gold prices in the months ahead,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

Higher interest rates tend to be bad news for gold, as they increase the opportunity cost of holding non-yielding assets such as the yellow metal.
However, the scenario outlined by Richey is not set in stone. “[I]f any catalyst, be it geopolitical (think North Korea) or otherwise, changes the outlook for any of those three bearish influences, gold could rebound back toward the mid-$1,300s in a hurry,” he added.
The US dollar rebounded in September, and could also hurt the gold price moving forward, as a stronger greenback makes commodities priced in dollars more expensive for investors using other currencies.
“We expect the dollar to continue to recover, which will probably weigh on gold, silver and platinum prices,” ABN Amro Bank analyst Georgette Boele said in a note to clients. Click here to learn more about what factors will drive the gold price in Q4.
Looking over to silver, the white metal was on track for a monthly decline of almost 5 percent, but was set to end the quarter 1 percent higher. As of 1:00 p.m. EST on Friday, silver was at $16.73 per ounce.
Palladium prices traded above platinum prices for the first time since 2001 on Thursday (September 28). On Friday, palladium was on track for a quarterly gain, trading at $931.72 per ounce. Meanwhile, platinum was set for its worst month in more than a year, changing hands at $912.99 per ounce.

On the base metals side, copper rose to its highest level in more than two weeks on Friday, and was set for for a quarterly gain. LME copper was trading at $6,530 a tonne that day. 
Lastly, spot oil edged lower on Friday, but stayed on track to end the quarter higher. Concerns over the potential fallout from the Kurdish independence referendum put pressure on prices.
November West Texas Intermediate crude fell 0.3 percent, to $51.40 a barrel, on the New York Mercantile Exchange, while Brent crude for November delivery on London’s ICE Futures exchange was down 0.1 percent, at $57.48 a barrel.
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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 Recovers from Four-week Low
By Charlotte McLeod, September 24, 2017
The gold price rose on Friday (September 22) after taking a fall earlier this week.  
Safe-haven demand caused by heightened tensions between the US and North Korea pushed the yellow metal up to $1,294.49 per ounce as of 12:00 p.m. EST Friday morning. It hit a four-week low of $1,287.61 during the previous session.
After US President Donald Trump vowed to destroy North Korea if provoked, the country said it might test a hydrogen bomb over the Pacific Ocean. North Korean leader Kim Jong-un called Trump “mentally deranged” and promised to make him pay for his threats.
“Gold took quite a beating after the U.S. Federal Reserve meeting but now the market got the news about North Korea and now investors are moving back in gold,” Danske Bank (CPH:DANSKE) analyst Jens Pedersen told Reuters.

The Fed wrapped up a two-day meeting on Wednesday (September 20). The central bank did not raise interest rates, but indicated that it plans to do so one more time in 2017 and three times in 2018.
The gold price retreated under the $1,300 mark on the back of the news, and many market watchers anticipate continued pressure for the precious metal in the coming months. When interest rates are higher, the investment appeal of non-yielding assets like gold tends to decrease.
Looking over to silver, the white metal saw similar price action this week. Like gold, it retreated after the Fed meeting, but saw its performance improve slightly on Friday. As of 12:00 p.m. EST that day silver was changing hands at $16.93 per ounce.
Copper also suffered after the central bank met this week, sinking to a one-month low of $6,427.50 per tonne on Thursday (September 21). Experts have varied opinions on how the base metal will fare moving forward, and some have suggested that its rally this summer was “overhyped.”
Finally, oil prices put on a mixed performance on Friday before hanging onto a weekly gain. According to MarketWatch, West Texas Intermediate crude for November delivery rose a cent to reach $50.56 per barrel on the NYMEX, while November Brent crude closed at $56.81 per barrel on the ICE Futures Europe exchange — that’s its highest level since late February.
In a Friday meeting in Vienna, OPEC and other major oil producers said that their efforts to clear the global oil supply glut are seeing success. OPEC and its allies have reduced their output by about 1.8 million barrels a day since the start of the year, and reiterated at this week’s meeting that they are considering extending the deal beyond its March 2018 expiry date.
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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