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Gold Poised for Another Weekly Gain Amid Market Rout

October 26, 2018 at 14:30 by Andrew Moran

Gold futures are on track for another weekly gain as the yellow metal has recorded the longest string of gains since the beginning of the year. With investors pouring into the safe-haven asset amid the global financial market rout, gold prices are tacking on gains to end the trading week.

December gold futures rose $4.90, or 0.4%, to $1,237.30 per ounce at 14:57 GMT on Friday. This is the best level for gold in three months. Gold prices are poised for a weekly jump of 0.6%, the fourth consecutive weekly increase, which is the best since January. Year-to-date, gold is still down roughly 7%, but it has been climbing more than 3% this month.

Silver, the sister commodity to gold, is also rallying to finish off the trading week. December silver futures edged up $0.085, or 0.58%, to $14.715 an ounce. The white metal is also getting ready to record a tepid weekly boost of 0.4%. Like its metal counterpart, silver prices remain down 15% in 2018.

Precious metals appear to be benefiting from the selloff in international equities. With growing economic uncertainty and rising geopolitical tensions, investors are flowing into bullion, lifting it firmly above $1,200.

Gold’s gains were capped by two things: the latest gross domestic product (GDP) numbers and the US dollar’s modest jump.

According to the Bureau of Economic Analysis (BEA), the US economy expanded at an annualized pace of 3.5% in the third-quarter. While it did slow down from the second-quarter’s impressive 4.2% pace, the July-to-September figures beat market forecasts of 3.4%.

This was driven by consumer spending, representing two thirds of US economic activity, as it grew by 5%, the best since Q4 2014. But business spending declined 7.9%, the largest quarterly drop since Q1 2016. The same report found that the Personal Consumption Expenditures (PCE) price index, an important measure for inflation, advanced by 1.6%, lower than the 2.2% expectations.

Overall, the admirable numbers lifted the US dollar as the greenback climbed 0.08% to 96.67. The buck is poised for a weekly surge of 1%. A stronger currency is bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.

In other metal commodities, December copper futures tumbled $0.026, or 0.94%, to $2.728 per pound. December platinum futures dipped $1.00, or 0.12%, to $830.50 an ounce. December palladium futures shed $8.00, or 0.74%, to $1,079.60 per ounce.

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