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Gold Poised for Weekly Drop, Monthly Advance

April 28, 2017 at 16:54 by Andrew Moran

Gold futures are on track for a weekly drop and a monthly advance. The yellow metal had a roller coaster ride in April, stemming from geopolitical tensions, mixed economic data, and the French elections.

June gold futures rose $2.00, or 0.16%, to $1,267.90 per ounce at 16:33 GMT on Friday. Despite the modest rebound late in the trading week, gold prices are on a track for a weekly loss of 1.4%. Gold futures are poised for a monthly gain of 1.4%.

Silver is continuing to trade in the red to end the trading week. July silver futures tumbled $0.08, or 0.49%, to $17.18 an ounce. The precious metal will record a weekly decline of nearly 3%.

Gold prices are being supported by disappointing economic data on Friday. According to the Department of Commerce, US gross domestic product (GDP) increased a tepid 0.7% in the first quarter of 2017. This is down from 2.1% and 3.5% in the final two quarters of last year. Experts are blaming lackluster consumer spending, the US government reducing spending, and businesses scaling back on inventory levels.

The yellow metal was further supported by a weaker US dollar. The greenback shed 0.2%, falling to a near six-month low. This is a boon for commodities like gold and silver because it makes it cheaper for foreign investors to purchase. The US dollar dipped against the euro as reports suggest that the European Central Bank (ECB) may finally begin to curb its stimulus measures as early as this summer.

Gold bugs are beginning to pay attention to the latest mining numbers from the World Gold Council (WGC). The gold organization reported that global mining adds at least 2,500 tonnes to the overall global gold stocks, and there is an estimated 56,000 tonnes of gold yet to be mined. And this report has some gold enthusiasts averring that mining firms have reached peak gold.

With growing global uncertainty forming in the Middle East and East Asia, traders think that the correction will not last for much longer.

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

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