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After reaching a three-month high earlier in the week, the gold price settled slightly lower on Friday. However, the metal is still on track for its biggest weekly gain since mid-January. Silver and copper also gained this week.
After reaching a three-month high earlier in the week, the gold price settled slightly lower on Friday. However, according to Reuters, the metal is still on track for its biggest weekly gain since mid-January.
Specifically, gold rose 0.2 percent on Friday to hit $1,223.76 an ounce. Meanwhile, gold futures dipped to $1,223.70, a drop of $1.50 an ounce.
The increase came as the US dollar eased against the euro. Additionally, US economic data furthered expectations that an interest rate rise will not take place until later in the year.
“If the data remains soft in the United States, this rally has potential,” said Eugen Weinberg, a Commerzbank (ETR:CBK) analyst. “When data is more on the soft side, the market will be looking for indications on when the Fed will be raising interest rates. Sentiment recently on gold has been very weak. Outstanding net length of speculators has been extremely low, so I wouldn’t be surprised to see them adding to positions over the next days and weeks.”
Silver, which is also affected by the U.S. currency, increased 0.6 percent to hit $17.55 an ounce. That is the metal’s largest weekly gain in nearly two months.
Copper on the London Metal Exchange also increased as the week came to a close, as per Reuters. The metal rose 0.3 percent to hit $6,418 a tonne, and investors consider the rally to be an overshoot of the realistic supply and demand situation.
“Right now, we’re probably above fundamentally justified levels, given that we’ve really not seen a big shift in increased physical buying,” said Robin Bhar, head of metals research at Societe Generale (EPA:GLE) in London. “There’s maybe been some long liquidation setting in ahead of the weekend, and there are some investors out there thinking it’s not going to get any higher from here, let’s go short.”
Meanwhile, copper on the COMEX was up 0.08 percent, at $2.95 a pound, as noted by MarketWatch.
Finally, Reuters states that the Brent crude price dropped to $65.80 a barrel. The fall followed reports of growth in global supplies. In fact, inventory oversupply is so significant that even if demand picks up, there is unlikely to be a shortage.
“We have an oversupply of more than 2 million bpd, almost 3 million bpd,” said Weinberg. “It must weigh on the market.”
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