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Weekly Round-Up: Gold Price Up on Weaker Dollar and Political Concerns
The week saw an uptick in prices for precious metals due to a weakened dollar caused by political concerns. Oil saw a weekly decrease over surging supply.
The gold price found itself in an upward motion on Friday (March 16) due to a weaker dollar and safe-haven demand amid US political concerns.
While further gains were capped over the likelihood that the US Federal Reserve will raise interest rates at its policy meeting next week, experts still like gold for the current state of the market.
“As choppier markets seem likely, gold will remain a good hedge against unexpected spikes in equity market volatility and geopolitical tensions, in our view,” UBS (NYSE:UBS) analysts said in a note.
Uncertainties from recent departures of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration have left investors worried. This political shakeup resulted in a weakened dollar, which makes bullion cheaper for holders of other currencies.
As of 9:05 a.m. EST on Friday, gold was trading at US$1,319.30 per ounce.
For its part, silver rose 0.5 percent and as of 9:10 a.m. EST on Friday it sat at US$16.45 an ounce. Much like gold, the grey metal is seen as a safe haven in times of political uncertainty and market volatility. When investors become worried, oftentimes they turn to gold first and then silver.
Despite silver’s rally at the end of the week, it is still headed for a 2-percent weekly loss.
Rounding out the week in metals is copper, which was down for the week because the US central bank is expected to raise interest rates for the first time this year. As of 12:07 p.m. EST copperwas trading at US$3.13 per pound.
Meanwhile, oil prices are set for a weekly drop on the back of concerns over rising supply. According to Reuters, even though oil made a slight gain in both benchmarks on Friday, it is hampered by concerns that rising global supply could undermine efforts by OPEC and other producers to tighten the market.
On Thursday (March 15), the International Energy Agency said global oil supply increased in February by 700,000 barrels per day (bpd) from a year ago to 97.9 million bpd.
“Part of the stock build is seasonal but some investors did not expect it to happen in an era of production cuts, which suggests the OPEC cuts may not be enough,” Olivier Jakob of PetroMatrix said.
As of Friday at 10:14 a.m. EST, oil was sitting at US$61.16 per barrel.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
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