Weekly Round-Up: Gold Price Lowest Since Q1 2010

It was more hard times for the gold price this week. Amid a selloff on Monday it dropped over 3 percent, incurring its worst single-day loss since September 2013 and reaching the critical support level of $1,100 per ounce. 
While speculation was initially rife that selling began in China, since then the World Gold Council (WGC) has come forward to suggest that the “fall was precipitated by significant trades on the Globex platform on the COMEX and the Shanghai Gold Exchange.”
More specifically, the organization states that 4.7 tonnes of gold were offloaded on the Shanghai Gold Exchange at about the same time increased volumes were seen on the COMEX — that’s an “exceptionally large amount in a short space of time.” Furthermore, “[b]oth trades were made during periods of low market liquidity,” the WGC states.
All in all, the WGC believes that the fall “was triggered by isolated trades” that are “not representative of the broader supply and demand dynamics.” Market watchers could be forgiven for disagreeing, however — as of 2:00 p.m. EST on Friday, the gold price was still below $1,100, sitting at $1,096.05. That’s its lowest price level since the first quarter of 2010.
Though the silver price generally follows the gold price, this week it fared markedly better. It hit a low of $14.64 per ounce during Monday’s gold selloff, but recovered to $14.94 later in the week and was at $14.57 as of 2:00 p.m. EST on Friday.
On the base metals side, three-month copper futures slipped Friday to $5,202.50 per metric ton on the London Metal Exchange, The Wall Street Journal reported. That’s the lowest they’ve been in six years.
Explaining the fall, Avatar Sandhu, senior manager of commodities at Phillip Futures in Singapore, told the news outlet, “[i]t is a double whammy for metals. On the one hand you have excess supply from mines, and on the other weak demand from China.” Opinions are divided on where the copper price will go in the future — some believe a deficit is in the cards in the coming years while others think the metal’s price will continue to decline.
Finally, the oil price continues to hover at around the $50-per-barrel mark. According to MarketWatch, September West Texas Intermediate crude was down 0.6 percent, at $48.18 per barrel, on the NYMEX on Friday. That’s more than 5 percent lower for the week. The news outlet notes that oil futures are now “off more than 20% since their highs above $61 a barrel in June, fitting the bill for a bear market.”
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
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