Weekly Round-Up: Gold Ticks Down, Heads For Second Weekly Loss

The gold price remained firm early Friday (February 9), but concerns about rising global interest rates, paired with a firmer US dollar, weighed on prices.

As of 10:00 a.m. EST on Friday, gold was trading at $1,313.80 per ounce after dipping down to  $1,306.81 on Thursday (February 8) — its lowest price since January 4. 

Spot gold was down 1 percent for the week and headed towards its second weekly drop due to the dollar recovery. A stronger greenback makes commodities priced in dollars more expensive for investors using other currencies.

On a positive note, analysts believe that there is an end in sight to the tumble of gold prices. Helen Lau, analyst at Argonaut Securities, told Reuters, “[T]he threat of rising interest rates will have some downside pressure on gold… however, in the near-term gold will gain due to volatile markets.”

The yellow metal tends to fare better when rates are low, as higher interests increase the opportunity cost of holding non-yielding bullion.

Silver is also down for the week, trading at $16.25 per ounce as of 10:13 a.m. EST on Friday, rallying marginally from Thursday’s low of $16.22— its lowest since July 30, 2017.

Like gold, silver dropped when the US stock market opened solidly higher and was under pressure due to a stronger dollar. However, chances are that stock indexes continue to be volatile, supporting demand of precious metals as investors turn to safe haven assets.

Rounding out the week in metals is copper, which saw another week of decreases, slipping from last week’s price of  $3.21 per pound to $3.06 per pound as of 11:309 a.m. EST on Friday. LME copper fell to an 8-week low, closing the week at $6,750 per tonne.

Meanwhile, oil was also down for the sixth day in a row, sitting at $59.73 per barrel as of 11:12 a.m. EST on Friday. 

Oil prices began to fall when new data showed that US crude stockpiles increased by 1.9 million barrels last week. This increase contradicted an earlier report that stated inventories had dropped.

Also affecting oil prices was the shutdown of the the Forties pipeline, Britain’s most important oil and gas pipeline. On Wednesday (February 7), automated safety systems shut down the 450,000-barrel-per-day system, for the second time in two months.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.