Weekly Round-Up: Gold Price Nears $1,290 After Flynn's Guilty Plea

The gold price was trading near $1,290 per ounce late Friday (December 1) morning after Michael Flynn pled guilty to making false statements to the FBI.
Flynn, who resigned from his position as US national security advisor in February of this year, has also agreed to cooperate with an ongoing investigation into Russian tampering with the 2016 US presidential election. The probe is being led by Special Counsel Robert Mueller.
“Traders are extrapolating this news to potentially mean that President Trump may be in very serious trouble, if he did indeed collaborate with the Russians on the U.S. election tampering,” said Kitco’s Jim Wyckoff after the news hit the market. He added, “[t]he U.S. stock market quickly sold off on this news, which also helped to lift safe-haven gold.”

Wyckoff also cautioned that gold’s positive price momentum may not last. “Remember that the marketplace, when hit with surprising news such as this, typically factors in a near worst-case scenario on the matter,” he said. The gold price was at $1,289.20 per ounce as of 11:30 a.m. EST on Friday.
Meanwhile, the silver price hit an eight-week low on Tuesday (November 28), but like gold saw some upward momentum on Friday on the back of Flynn’s guilty plea. As of 11:30 a.m. EST on Friday the white metal was changing hands at $16.54 per ounce.
Both silver and gold may also be affected by the upcoming US tax reform bill vote. The vote was supposed to take place on Thursday (November 30), but was delayed due to a procedural issue. Speaking to Reuters, Commerzbank (OTCMKTS:CRZBY) analyst Carsten Fritsch commented, “[t]ax reform would be negative for gold because this will lead to higher inflation and more Fed rate hikes.”
On the base metals side, the copper price began the month on a positive note, with three-month copper on the London Metal Exchange at $6,770 per tonne as of 7:00 a.m. GMT on Friday; the red metal traded flat in the previous session. Some market watchers have pointed to China’s weak November manufacturing data and increasing copper output as possible negative copper price catalysts.
Finally, oil prices were up near 2015 highs on Friday after Thursday’s news that OPEC and other major oil producers will extend production cuts until the end of 2018. Brent futures were trading at $64.17 per barrel as of 10:51 a.m. EST, while US West Texas Intermediate crude was up 2.3 percent, at $58.73 per barrel. Brent futures bottomed out at around $27 in January 2016.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.