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Gold Continues Rebound, Touches Two-Week High

July 9, 2018 at 17:28 by Andrew Moran

Gold futures are continuing to rebound from their 2018 lows as the yellow metal touches its best level in about two weeks. Gold prices are gaining on US foreign policy woes, a lower greenback, and trade spats.

August gold futures rose $3.90, or 0.31%, to $1,259.70 per ounce at 15:06 GMT on Monday. The last time gold traded this high was at the end of June. Year-to-date, the precious metal is still down more than 4.5%, experiencing most of those losses in the last month.

Silver is also rallying to kick off a week of trading. September silver futures advanced $0.08, or 0.50%, to $16.15 an ounce. The white metal, which posted a modest weekly loss last week, is also hovering around a two-week high.

Investors are keeping a close eye on a couple of important US foreign policy events over the next week. The North Atlantic Treaty Organization (NATO) will meet this week, and many analysts say President Donald Trump and his bag of surprises may impact the US dollar and gold. Moreover, President Trump is scheduled to sit down with Russian President Vladimir Putin in Helsinki.

The US dollar was trading lower on Monday, but it pared those losses and now the greenback is relatively flat at 94.13. A weaker buck is good for commodities pegged in dollars because it makes it cheaper for foreign investors to purchase. Despite starting off the year in the red, the US dollar has risen nearly 5% over the last three months.

Although trade is not dominating the headlines on Monday, it is still lingering in the background. In recent days, Washington imposed tariffs on $34 billion of Chinese goods, leading China to retaliate. Canada and the European Union (EU) have also been engaging in tit-for-tat tariffs.

Last week, the US government reported that the national economy added a better-than-expected 213,000 jobs in June, giving the Federal Reserve more ammunition to pull the trigger on two hikes to interest rates. Gold is generally sensitive to a rising-rate environment because it lifts the opportunity cost, sending traders into yield-bearing assets.

The entire metals market is seeing green. September copper futures jumped $0.03, or 1.05%, to $2.85 per pound. September platinum futures added $4.60, or 0.54%, to $853.20 an ounce. September palladium futures surged $7.10, or 0.75%, to $954.70 per ounce.

If you have any questions and comments on commodities today, use the form below to reply.

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