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Gold Flirts With $1,600 As Precious Metal Settles at Seven-Year High

January 6, 2020 at 20:29 by Andrew Moran

Gold futures settled at their best levels in nearly seven years to start the trading week, flirting with the crucial $1,600 mark. Investors are seemingly pouring into the safe-haven asset as the US and Iran escalate tensions days after Washington killed Qassem Soleimani, leader of the foreign wing of Tehran’s Islamic Revolutionary Guard Corps. While the American drone strike and potential fallout have created some consternation in financial markets and lifted crude oil markets, losses in equities have been relatively subdued.

February gold futures surged $14.30, or 0.92%, to $1,566.70 per ounce at 19:11 GMT on Monday on the Comex division of the New York Mercantile Exchange. The yellow metal recorded gains for the ninth consecutive session and settled at its highest level since April 2013. Gold briefly topped $1,580 in intraday trading before paring those gains.

Silver, the sister commodity to gold, is relatively flat to kick off the trading week. March silver futures picked up $0.01, or 0.07%, to $18.16 per ounce. The white metal is also trading at its best level since the end of September.

Analysts are purporting that there could be more room for gains as geopolitical uncertainty plagues markets. Whether you are a short- or long-term gold bug, you might be in store for some spikes in the coming weeks or months. But there might be sessions where gold contracts, typically because geopolitical events are temporary.

Other traders think without another significant event – militarily or cyber – equities markets will weather the storm.

On Sunday, the Iraqi parliament voted to expel US troops from the country over the killing of Soleimani. The leadership has since backtracked after President Donald Trump promised “very big sanctions” on Baghdad, which the country knows all too well dating back to the 1990s under the reign of Saddam Hussein. That said, the White House has deployed thousands of American troops to the Middle East in the wake of renewed conflict with Iran.

Gold was further supported by softness in the US dollar as the greenback tumbled 0.16% to 96.68, from an opening of 96.90. A weaker buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

In other metal markets, February copper futures were unchanged at $2.79 per pound. March platinum futures plunged $23.50, or 2.37%, to $966.80 an ounce. March palladium futures soared $36.30, or 1.86%, to $1,992.00 per ounce.

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

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