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Silver was also on the rise, and copper was at a three-week high on Friday morning. Oil prices were set to end the week flat.
The gold price was on track for its first weekly gain in four weeks on Friday (December 15), spurred upward by uncertainty surrounding US tax reform.
According to Reuters, the US dollar was pushed to a nine-day low against the yen due to that uncertainty. “The U.S. dollar is weakening a little and that’s benefiting gold,” Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong, told the news outlet.
The yellow metal hit a five-month low on Monday (December 11), dropping to $1,235.93 per ounce, but rebounded Wednesday (December 13) after the US Federal Reserve raised interest rates for the third time in 2017. Three hikes are projected in 2018.
Higher interest rates are usually negative for gold as they increase bond yields and reduce the appeal of non-yielding bullion. However, Wednesday’s rate hike was anticipated by market watchers, and the price climbed after it was announced instead.
“Gold certainly fell over last few weeks in anticipation of the widely anticipated rate hike. The hike was no surprise while the commentary was moderately ‘gold friendly,’ so we expect gold to make up much if not all of the recent decline in coming weeks,” Adrian Day of Adrian Day Asset Management told Kitco.
As of Friday at 12:00 p.m. EST, gold was changing hands at $1,254.75. Click here to see what analysts believe is in store for the metal in 2018.
Looking over to silver, the white metal was sitting at $15.98 per ounce as of 12:01 p.m. EST on Friday. Its price movement has been similar to gold’s this week — it declined in the run up to the Fed’s rate decision and then ticked upward after the central bank announced its decision.
On the base metals side, copper reached a three-week high on Friday after expectations of strong Chinese demand were bolstered by industrial activity data. Reuters says benchmark copper on the LME was up 1.3 percent, at $6,879 per tonne, its highest level since November 28.
“Fundamentals are pretty strong on the back of the global economy and China,” Societe Generale (EPA:GLE) analyst Robin Bhar said. “We may see some volatility over the new year and we may have to wait until after the Chinese new year in February to see clear where China demand is going.”
Finally, oil prices were sitting below two-year highs on Friday, with prices being supported by production cuts from OPEC and the outage of a North Sea pipeline. Brent crude futures were down a penny at $63.30 per barrel as of 10:41 a.m. EST, while West Texas Intermediate crude futures were at $57.18 per barrel, up $0.14. Both appear set to end the week flat.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.