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Gold Eyes Narrow Weekly Gain As Weaker Equities Lift Metals

October 19, 2018 at 15:06 by Andrew Moran

Gold futures are on track for their third consecutively weekly gain as metal commodities were lifted by weaker global financial markets. As investors sought refuge in the traditional safe-haven asset, the yellow metal was able to take advantage and trade at its highest level in three months.

December gold futures tacked on $1.00, or 0.1%, to $1,231.20 per ounce at 15:42 GMT on Friday. Gold prices are poised for a weekly jump of 0.8% as they have advanced 2.3% over the last month.

Silver, the sister commodity to gold, is posting modest gains. December silver futures rose $0.07, or 0.5%, to $14.67 an ounce. The white metal will record a narrow increase or 0.3% for the week. Despite the 2.5% jump since the middle of September, silver is down 15% year-to-date.

Haven gold is getting support from investors who seemingly fearful of the recent performance in global stocks. Although US markets are beginning to somewhat recover, there are other external factors at play, including the budget and debt conflict between Italy and the European Union. Gold also found direction in additional ETF inflows.

Precious metals were helped by a tumbling US dollar as the greenback slipped 0.14% to 95.84. The buck is getting ready to report a 0.6% weekly boost. A weaker currency is good for dollar-priced commodities because it makes it cheaper for foreign investors to purchase.

Despite a hawkish Federal Reserve, which was highlighted in the release of the Federal Open Market Committee (FOMC)’s latest minutes, gold prices have exceeded the 100-day moving average. The central bank is widely expected to raise interest rates in December, but some analysts are concerned that additional rate hikes could be a sign the national economy is overheating, something that would spur a rally in gold.

Gold is generally sensitive to a rising-rate environment because it increases the opportunity cost and sends traders into yield-bearing assets.

In other metals markets, December copper futures edged up $0.03, or 1.00%, to $2.78 a pound. December platinum futures rose $5.20, or 0.63%, to $836.90 an ounce. December palladium futures surged $11.80, or 1.11%, to $1,076.50 per ounce.

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