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Gold Poised for Weekly Loss Despite US Political Turmoil

March 16, 2018 at 15:42 by Andrew Moran

Gold futures are hovering just above the crucial $1,300 threshold as the yellow metal is poised for yet another weekly loss. Gold prices could settle at their worst levels in a month, continuing to record losses in March.

April gold futures tumbled $7.00, or 0.53%, to $1,310.80 per ounce at 15:17 GMT on Friday. The yellow metal is on track for a weekly decline of 1%.

Silver, the sister commodity to gold, is also bleeding red ink to finish the trading week. May silver futures plunged $0.207, or 1.26%, to $16.21 an ounce. The white metal is getting ready to report a 2.3% weekly drop.

Year-to-date, gold is flat, while silver has slipped nearly 5%.

Precious metals were hurt by a rising US dollar as the greenback surged 0.24%, climbing above the important 90 mark. The dollar will squeeze out a 0.28% weekly gain. A stronger buck is bad for dollar-denominated commodities like gold and silver because it makes it more expensive for foreign investors to purchase.

Despite the political turmoil occurring in the White House and the pending trade war between the US and the rest of the world, investors are not flocking to the safe-haven assets.

This week, President Donald Trump fired Secretary of State Rex Tillerson, and now there are reports that national security adviser H.R. McMaster is next on the chopping block. Last week, the president enacted the 25% tariff on imported steel and 10% levy on imported aluminum.

MarketWatch’s Mark Hulbert suggests that gold buyers are looking for a clearer bearish signal to add to their positions. This would give the yellow metal a boost in value. He writes:

The picture that is emerging is one in which the gold timers are reluctant to reduce exposure in the face of gold weakness, but quick to increase exposure in the face of gold strength. That [is] just the opposite of the stubbornly-held bearishness that typically characterizes more significant bottoms.

Investors will now look ahead to next week’s two-day Federal Open Market Committee (FOMC) policy meeting. The market is anticipating the Federal Reserve will raise interest rates, which will affect gold prices because it is generally sensitive to a rising-rate environment since the opportunity cost is lifted and traders seek out yield-bearing assets.

Other metals are trading lower on Friday. May copper futures slipped $0.033, or 1.07%, to $3.094 per pound. May platinum futures slid $9.70, or 1.01%, to $947.20 an ounce. May palladium futures are flat at $981.75 per ounce.

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