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Gold Nears $1,300 amid Rising Geopolitical Risks

April 17, 2017 at 15:14 by Andrew Moran

Gold futures are trading at their highest levels since Decembers as traders return from the Easter holiday. Investors are seeking out safe-haven assets as geopolitical risks intensify and regional tensions rise. The yellow metal is nearing $1,300 – the last time gold crossed that important mark was in November.

June gold futures climbed $3.10, or 0.24%, to $1,291.60 per ounce at 14:39 GMT on Monday. Gold prices are trading at five-month highs. This comes as the precious metal recorded another weekly gain of 2.5% last week.

Silver is also advancing to kick off the trading week. May silver futures rose $0.02, or 0.11%, to $18.53 an ounce. Silver is trading at levels unseen since November. The precious metal also posted a weekly gain of 2% last week.

Investors have been on the lookout for safe-haven assets for the last week due to global fears.

North Korea launched a failed missile test on Sunday, adding to growing geopolitical risks. US President Donald Trump and his administration have had stern words for the Pyongyang leadership, while also encouraging China to apply greater pressure to North Korea. The Syrian airstrike was another event that has spooked investors as it remains unclear if the US military will take more action in the country.

Traders are looking ahead to Sunday’s French presidential election. The latest polls suggest that National Front leader Marine Le Pen is topping the field of candidates. Analysts are studying a wide array of scenarios in the second-round runoff.

A plethora of negative economic data helped propel the yellow metal. In addition to the weak jobs numbers, a report on retail sales in March showed the worst two-month stretch since 2015. Moreover, manufacturing in New York slowed this month with a reading of 5.2, down from 16.4 in March.

Gold was further supported by a declining US dollar. The greenback shed 0.3% on Monday on President Trump’s criticisms of a strong dollar policy. This helped the US dollar slip to a five-month low. A weak US dollar helps make commodities like gold and silver cheaper for foreign investors to purchase.

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

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