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Gold Futures Fall as US Dollar Strengthens

August 8, 2017 at 16:39 by Andrew Moran

Gold prices are trading lower on Tuesday as the US dollar climbs. The yellow metal has tumbled in four of the last five trading sessions, causing gold to record its first weekly loss last week in a month.

December gold futures dipped $5.10, or 0.40%, to $1,259.60 per ounce at 16:19 GMT on Tuesday. The precious metal has been battered over the past week thanks to an excellent July jobs report and a rising greenback.

Silver, the sister commodity to gold, is rallying on the second trading day of the week. September silver futures rose $0.12, or 0.79%, to $16.38 an ounce. The white metal is looking to snap its four-session losing streak.

Year-to-date, gold prices have risen more than 8%, silver prices have been relatively flat.

The US dollar is up 0.38% on Tuesday and has advanced more than 0.5% so far this month. Over the last 30 days, the US dollar has plunged nearly 3% thanks to mixed US economic data and political turmoil in Washington — the US dollar has fallen to pre-election lows this summer. A stronger dollar is bad for commodities like gold and silver because it makes it more expensive for foreign investors to purchase.

Another concern for gold investors is when the Federal Reserve will next raise interest rates. Because of tepid inflation and multiple global risks, some investors think the US central bank will postpone a third 2017 rate hike until the end of the year. According to the CME Group FedWatch tool, there is a 10% chance of a September rate hike; this shoots up to 50% in December.

Gold’s losses were capped because of heightened geopolitical tensions between the US and North Korea. The Kim Jong-un regime conducted yet another intercontinental ballistic missile test over the weekend, spurring condemnation from the international community and widespread sanctions.

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