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Gold Futures Suddenly Tumble, Still Post Weekly Gain

November 10, 2017 at 17:28 by Andrew Moran

Gold futures are falling on the final trading session of the week, but the yellow metal is still on track to post a weekly gain. Gold prices have been benefiting all week from a lower US dollar, concerns over the Republicans’ tax reform plan, and mixed economic data. The decline in gold came out of nowhere.

December gold futures tumbled $10.30, or 0.80%, to $1,277.20 per ounce at 16:14 GMT on Friday. Gold is still trading at its best levels in about three weeks. Despite the steep decline, gold is on track for a weekly gain of 1.2%, continuing the string of weekly advances.

Silver, the sister commodity to gold, is also slipping to end the trading week. December silver futures dipped $0.10, or 0.59%, to $16.87 an ounce. The white metal is poised for a weekly jump of 1.4%.

Many investors were surprised on Friday when gold suddenly lost about 1% of its value in 15 minutes. During the selling activity, trading volumes had also climbed significantly higher.

Precious metals have been rallying all week on a lower US dollar as the greenback suffered its biggest one-day loss on Thursday since the beginning of October. On Friday, the greenback slipped 0.14%, and will likely post a weekly loss. A weaker US dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

Gold prices have also been surging on investor concerns that the GOP’s Tax Cut and Jobs Act could be delayed. Analysts note that the US Senate’s tax cut proposal is immensely underwhelming the market, causing worries within Washington that President Donald Trump’s pro-business agenda may take a hit.

The market is still expecting the Federal Reserve to raise interest rates at next month’s Federal Open Market Committee (FOMC) policy meeting. This comes as the president nominated Fed Governor Jerome Powell to lead the US central bank once the incumbent’s term is over next year.

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