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Gold Edges Higher After Posting Lowest 2018 Settlement

June 18, 2018 at 16:48 by Andrew Moran

Gold futures are inching higher to kick off the trading week, attempting to rebound from their lowest settlement of 2018 last week. The yellow metal is trying to pick up steam from trade war fears, recent dovish central bank moves, and a lower US dollar.

August gold futures rose $2.60, or 0.2%, to $1,281.10 per ounce at 16:26 GMT on Monday. Gold prices finished the Friday trading session at their lowest levels since December and recorded a 2% weekly drop.

Silver, the sister commodity to gold, is trying to find direction on Monday. July silver futures are relatively unchanged at $16.48 an ounce. The white metal reported a small weekly decline of 0.2% last week.

The US dollar is slipping as the greenback is down 0.2% to 94.86. A stronger buck, which posted a weekly jump of more than 1% last week, is generally bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase. US Treasuries lent some support to the metals as the 10-year Treasury note yield fell to 2.911%. Treasuries and gold typically trade inversely.

Investors appear to be gradually diving back into the safe-haven asset as the global trade war, particularly between the US and China, intensifies. The US equities market is also in the red with the Dow Jones tumbling nearly 200 points.

Last week, the European Central Bank (ECB) announced that it would start unwinding its quantitative easing program, but President Mario Draghi confirmed that it would keep interest rates at historic lows. The Bank of Japan (BOJ) left its stimulus efforts unrevised. This gave pause to observers about the strength of their respective economies. This is the opposite of the Federal Reserve, which completed a recent policy meeting by raising interest rates and continuing to reduce its $4.5 trillion balance sheet.

It is mixed in other metals markets at the start of the trading week. July copper futures plunged $0.036, or 1.14%, to $3.108 per pound. July platinum futures shed $4.10, or 0.46%, to $883.70 an ounce. July palladium futures added $2.20, or 0.22%, to $984.00 per ounce.

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