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Gold Stays Flat, Silver Dips Under $18

April 10, 2017 at 17:14 by Andrew Moran

Gold futures are trading flat to kick off the trading week. The yellow metal slipped from its five-month high as expectations that the Federal Reserve will raise interest rates increased once again. Investor concerns over geopolitical tensions have apparently simmered down.

June gold futures tumbled $0.40, or 0.03%, to $1,256.90 per ounce at 16:40 GMT on Monday. Gold had pared most of its losses after being down as much as $6. The precious metal posted its fourth straight weekly gain last week after advancing 1.5%.

Silver is also sinking to start the trading week. May silver futures declined $0.21, or 1.19%, to $17.93 an ounce. Silver recorded a tepid weekly gain of roughly 1% last week.

The precious metals are falling as investors prepare for the US central bank to raise rates. According to the CME Group FedWatch tool, there is a 62% chance of a rate hike at June’s Federal Open Market Committee (FOMC) meeting. Fed officials have penciled in at least two more rate hikes in 2017.

Gold is being supported by the upcoming election in France. A new poll found that National Front presidential candidate Marine Le Pen continues to gain ground. The latest numbers suggest that she is leading the field of candidates with 24% support. Le Pen pledged to hold a referendum on European Union (EU) membership if she wins this month’s presidential election.

Gold had climbed to a five-month high on Friday because of the US military strike against Syria and the weak US jobs report.

On Thursday evening, US President Donald Trump ordered at least 59 Tomahawk missiles to attack a Syrian air base that was reportedly responsible for last week’s chemical gas attack. The attack came at a time when the president was holding a face-to-face meeting with Chinese President Xi Jinping.

The yellow metal was also supported by the weak labor numbers on Friday. According to the Bureau of Labor Statistics (BLS), the US economy added just 98,000 jobs, which was a lot lower than initial projections of 185,000 jobs. Although some traders believed at the time it may discourage the Fed to raise rates, investors appeared to have revised their opinions on Monday.

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

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