Weekly Round-Up: Gold Holding Steady Ahead of Fed Meeting

The gold price hasn’t seen too much movement this week. After beginning the week at a high of $1,085.80 per ounce, it’s since sunk — it reached a low of $1,064.20 Thursday morning, and as of 1:00 p.m. EST that day was changing hands at $1,077.80. 
Worries about the US Federal Reserve’s next meeting, scheduled for December 15 to 16, have been weighing on the gold price. Expectations are high that during the meeting the central bank will raise interest rates for the first time in nearly a decade. Many believe that if that happens, the gold price will suffer, at least initially.
“Although a U.S. rate hike should be priced in, gold’s initial reaction will be to the downside,” Commerzbank’s (ETR:CBK) Daniel Briesemann told Reuters recently.
That said, some market watchers have offered other perspectives. For instance, well-known gold commentator Brien Lundin said earlier this year that he believes gold will get a boost if the Fed hikes rates. “I think that western speculators have piled on shorts in anticipation of the Fed beginning rate hikes, and that the actual start of that process would mark the end of that trade and force a lot of speculators to begin to cover,” he commented.

For its part, the silver price has fared much the same as the gold price this week. Though it started out the week at $14.60 per ounce, by 1:00 p.m. EST on Friday it was sitting at just $13.93
On the base metals side, the copper price got some support Friday, with three-month copper on the LME rising 2.5 percent to reach $4,703 per metric ton. According to The Wall Street Journal, the metal was boosted by a weaker dollar and “talk of production cuts from some of the world’s largest miners.”
Finally, oil prices fared poorly this week, with the Financial Times reporting that crude hit its lowest level in seven years on Friday. The news came after the International Energy Agency predicted that oil inventories will “continue to swell next year with supply outstripping demand.” In particular, it sees Iran’s return to world markets as adding to excess supply.
According to the news outlet, Brent crude slipped $2.37, to $37.36 per barrel, in afternoon trading — that’s its lowest since December 2008. Meanwhile, West Texas Intermediate fell $1.09 to reach $35.67, a point it last saw in February 2009.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
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