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Gold investors have had little to be thankful for this week.
The gold price took a steep drop on Friday, hitting a fresh five-and-a-half-year low. According to Bloomberg, COMEX gold for February delivery sank as low as $1,051.60 per ounce in early US trading.
Explaining gold’s poor price performance, the news outlet points to increased speculation that the US Federal Reserve will raise interest rates at its next meeting, scheduled for December 15 to 16. Such concerns “helped boost the dollar, curbing [gold’s] appeal as an alternative asset.”
Meanwhile, Kitco‘s Jim Wyckoff suggests that thin trading conditions in the precious metals markets on Friday exacerbated price moves for gold and silver. “Some U.S. markets close early, and Friday is typically one of the quietest trading days of the year,” he said.
As usual, the silver price moved much the same as the gold price this week. While the white metal reached a high of $14.28 per ounce on Tuesday, as of 12:00 p.m. EST on Friday it was changing hands at just $14.03.
On the base metals side, COMEX copper for March delivery was up 0.9 percent, at $2.067 per pound, on Friday morning. The Wall Street Journal states that “gains were muted as disappointing economic data from China weighed on sentiment.”
Nevertheless, it’s encouraging to see the copper price up, if only slightly — early in the week, some were concerned that the red metal might slip below $2 per pound.
Finally, oil prices saw declines Friday, with West Texas Intermediate futures slipping over 2 percent and Brent crude dropping 1 percent. According to Reuters, oil was hurt by “the dollar’s rally to an eight-month high and a tumble in Chinese equities.”
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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