Weekly Round-Up: Gold Price Up After Hitting Lowest Since 2010

The gold price saw some respite Friday after sinking Wednesday to $1,062 per ounce, its lowest level since February 2010. As of 2:00 p.m. EST on Friday it was sitting at $1,077.70. 
According to Reuters, gold’s Wednesday drop was driven by expectations that the US Federal Reserve will raise interest rates at its next meeting, scheduled for December 15 to 16. The central bank released the minutes for its last meeting that day, and they indicate that it will “move cautiously on rates.”
Speaking to the news outlet, Mitsubishi (TSE:8058) analyst Jonathan Butler said, “[w]hat we’re seeing now is a bit of short covering, moving on from the fact of a rate rise in December and questioning what the path is to tightening rates in 2016.”
What that path will be remains to be seen, but so far the consensus seems to be that the Fed will proceed fairly cautiously. As Ava Trade analyst Naeem Aslam said to Reuters, “[w]e are still unclear how much of a rate hike there will be by the Fed, but given all the comments which we had from the FOMC minutes, one element is clear — it is not going to be very aggressive.”

Similarly, George Gero, vice president of global futures at RBC Capital Markets, told Bloomberg, “[w]e have Fed members saying they will raise rates by December, which is old news. The metals have priced in at least one rate hike.”
Overall, the gold price has lost  5.62 percent in November and 9.77 percent year-to-date.
For its part, the silver price has largely followed the gold price this past week, though it saw less of a recovery on Friday. It dove Wednesday to $14.09 per ounce and recovered to $14.37 on Thursday, but as of 2:00 p.m. EST Friday was down at $14.15.
On the base metals side, the copper price sank to $2.0625 per pound Friday as the US dollar gained against the euro. Speaking to The Wall Street Journal, Daniel Pavilonis, senior market strategist at RJO Futures, said, “[t]he dollar is continuing to move higher and that puts pressure not just on copper, but metals in general.”
Pavilonis also said that anticipation of economic slowdowns in China and Europe is also harming the copper price. The red metal is used heavily in construction and manufacturing, and as a result is impacted by world economics.
Finally, oil prices trended upward Friday after Baker Hughes (NYSE:BHI) data showed that US oil rigs fell by 10 this week to hit 564. That’s much lower than the 1,574 rigs present this time last year. Reuters states that WTI futures for December delivery were up $0.19, at $40.74 per barrel, while WTI futures for January delivery were up $0.92, at $42.64.

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