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Gold Slips Despite Lower US Dollar, Geopolitical Uncertainty

May 14, 2018 at 16:22 by Andrew Moran

Gold futures are sliding to start the trading week, despite a lower US dollar and growing geopolitical uncertainty. The yellow metal continues to trade in the tight $1,300 to $1,350 range, where it has been confined to for much of 2018.

June gold futures dipped $1.30, or 0.10%, to $1,319.40 per ounce at 16:04 GMT on Monday. Gold prices have been trading below the three-week high of $1,322 for the past several trading sessions, but they were able to muster a modest 0.5% weekly gain last week. The yellow metal is on track for its fifth loss in six sessions.

The white metal is also slipping to kick off another week of trading. July silver futures tumbled $0.08, or 0.49%, to $16.67 an ounce. The sister commodity to gold has advanced over the last five trading sessions, but it has wiped out its gains over the last 12 months.

Even with all of the key indicators, the precious metals are unable to initiate a rally.

Poised for its fourth consecutive loss, the US dollar dropped 0.18% to 92.36. A weaker greenback is typically good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase. Last week, the buck endured its first weekly decline in four weeks. Year-to-date, the currency is still up about 0.25%.

Because of cooling inflation data, the market has started to reconsider the Federal Reserve’s plans to raise interest rates two more times this year. According to the CME Group FedWatch tool, there is a 95% chance of a rate hike at next month’s Federal Open Market Committee (FOMC), down from 99%.

Meanwhile, geopolitical tensions remain at the forefront of international markets. With uncertainty plaguing China, Iran, and North Korea, the market is experiencing some jitters. But the fears are not enough to send traders into yield-bearing assets like gold and silver.

Other metal commodities were mixed on Monday. July copper futures fell $0.02, or 0.7%, to $3.09 per pound. July platinum futures dropped $8.70, or 0.94%, to $917.20 an ounce. July palladium futures jumped $8.20, or 0.83%, to $993.40 per ounce.

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