Commodity Blog

Precious metals are on track to post small weekly gains as the US dollar tumbles on the final trading session of the week. It has been a rough start to July for gold and silver, but the metals are looking to rebound, even as the US central bank prepares for another rate hike.

August gold futures surged $13.40, or 1.10%, to $1,230.70 at 13:38 GMT on Friday. The yellow metal is poised to record a weekly gain of about 1% — gold prices have declined for the last five trading weeks.

Silver is also rallying to finish off the trading week. September silver futures rose $0.28, or 1.79% to $15.97 per ounce. The white metal is getting ready to report a weekly advance of about 2%. The sister commodity to gold slipped to a 16-month low last week with a weekly drop of 6.8%.

Despite stocks holding near record highs, the precious metals are being supported by a weaker US dollar. The greenback shed 0.53% on Friday, which helps dollar-denominated commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

Although the Federal Reserve will likely raise interest rates at least once more this year, Fed Chair Janet Yellen noted that the federal-funds rate would not need to climb significantly higher to achieve “a neutral policy stance.” She added that the central bank plans to gradually sell off its $4.5 trillion balance sheet.

Gold is sensitive to a rising-rate environment because it lifts the opportunity cost and sends investors into yield-bearing assets. Investors expect the Fed to raise rates at the September Federal Open Market Committee (FOMC) policy meeting.

The yellow metal had a three-session win streak snapped on Thursday as the US dollar inched higher and Yellen delivered her semi-annual testimony to Congress.

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