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Gold Poised for Worst Weekly Decline Since November

May 5, 2017 at 14:22 by Andrew Moran

Gold futures are trading in positive territory on the final trading session of the week, but the yellow metal is poised to record its worst weekly decline since November. Investors are jumping into gold as a safe-haven play on Friday, but the move is not enough to pare the precious metal’s weekly losses.

June gold futures rose $0.70, or 0.06%, to $1,229.30 per ounce at 1400 GMT on Friday. Gold prices are trading at seven-week lows. The yellow metal will also post a weekly drop of about 3.1%, the worst weekly dip in close to six months.

Silver, gold’s sister commodity, is trading flat to finish off the trading week. July silver futures rose $0.01, or 0.07%, to $16.31 an ounce. Silver is set to report a 5.2% drop, which is the worst weekly performance since the beginning of October.

The precious metals are trading lower as the Federal Reserve is getting ready to raise interest rates, something that could occur as early as next month. According to the CME Group FedWatch tool, there is an 80% chance of the Federal Open Market Committee (FOMC) pulling the trigger on a rate hike at next month’s policy meeting.

US government data suggest that the labor market may be able to handle a rate hike. The Bureau of Labor Statistics (BLS) reported that 211,000 people found new jobs in April. The biggest industry gains were found in leisure and hospitality, education and health services, and professional and business services. The unemployment rate fell to 4.4%, a post-recession low.

Gold is being supported by sliding oil and iron ore prices. US crude suffered a flash crash during overnight trading as traders remain concerned about a supply glut stemming from US shale. The trend in oil prices is having an impact on global stock prices, which is causing investors to seek out safe-haven assets.

Precious metals are finding more support from a weaker US dollar. The greenback slipped 0.03% against a basket of currencies. A weaker US dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

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

One Response to “Gold Poised for Worst Weekly Decline Since November”

  1. Debabrata Majumder

    Indian market what happen next week

    [Reply]

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