The gold price made significant gains this week on the back of continued weakness in the US dollar, reaching its highest value of 2018.
As of 2:00 p.m. EST on Friday (January 12), gold was trading at $1,338.25 per ounce, its peak level so far this year. The previous day, the yellow metal rose to its highest price in four months.
Gold has been rallying since mid-December. According to Kitco, multiple factors are behind gold’s price increase, but a weakening US dollar has had the biggest impact. Since gold is paired for price in US dollars, the two have an inverse relationship, meaning that a weak dollar tends to result in a stronger gold price.
For its part, silver was trading $17.08 per ounce as of 1:04 p.m. EST on Friday. Kitco notes that silver has hit a hurdle as prices are set to close the week in negative territory, ending a four-week winning streak.
Josh Graves, senior market strategist at RJO Futures, said he isn’t reading too much into silver’s recent underperformance. “I think silver’s weakness is based on the fact that all the attention is on gold,” he said. “Investors see more potential in gold as the U.S. dollar weakens.”
Rounding up the week in metals, as of 1:40 p.m. EST on Friday, copper was down slightly for the week, trading at $3.20 per pound.
Meanwhile, oil prices rose for a sixth consecutive day on Friday, and were holding at $64.12 per barrel as of 2:00 p.m. EST. According to Reuters, prices continued to gain after Russia’s oil minister said global crude supplies are “not balanced yet,” alleviating market concerns about a wind-down of the OPEC-led deal to reduce production.
Russian Energy Minister Alexander Novak said ministers from leading OPEC and non-OPEC producers will discuss the possibility of exiting the deal at a coming committee meeting, but said, “we see that the market surplus is decreasing, but the market is not completely balanced yet.” His comments boosted prices, which rebounded from an earlier decline.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.