Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Gold Posts Weekly Loss as Traders Retreat from Safe Haven Asset

September 15, 2017 at 16:53 by Andrew Moran

Gold futures posted solid gains last week as investors had fears over hurricanes, North Korea, and domestic political turmoil. This week has been a different story for the yellow metal, which is poised to record a weekly loss, its first in September.

December gold futures tumbled $2.80, or 0.21%, to $1,326.50 per ounce at 16:34 GMT on Friday. Gold prices have pulled back over the last several trading sessions and settled at their lowest levels in September on Thursday. Gold is also on track for a weekly loss of nearly 2% as traders flee from the safe haven asset and return to equities, ending the three-week winning streak.

Silver, the sister commodity to gold, is trading in red territory to end the trading week. December silver futures dipped $0.04, or 0.28%, to $17.74 an ounce. The white metal is set to suffer a 2.5% weekly loss.

Despite initial concerns over North Korea’s missile test on Friday morning, US stock indexes rebounded, causing investors to retreat from precious metals. With hurricane activity in the Atlantic subsiding, investors can now focus on equities.

Gold’s losses were capped by a declining US dollar as the greenback slipped 0.4%. A weaker US dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

The next major test for the yellow metal will be next week’s two-day Federal Open Market Committee (FOMC) meeting. The Federal Reserve is expected to debate raising interest rates. The US central bank has contended with mixed economic data: the consumer-price index (CPI) rose 0.4% last month, while the University of Michigan consumer-sentiment index declined from 96.8 in August to 95.3 in September.

Investors have not priced in a third rate hike in 2017 next week. According to the CME Group, there is a 1.4% chance of the Fed pulling the trigger on a rate hike. The market mostly expects an increase in December of 25 basis points.

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

Leave a Reply