The gold price was down slightly on Friday (June 8) on the back of a stronger dollar that was stopped short of making significant gains as investors prepare for the G7 summit in Canada.
As of 8:58 a.m. EST on Friday, the precious metal was trading at US $1,297.70 per ounce, slipping below the US$1,300 mark. Insiders believe that gold will find its footing next week in the post-G7 and pre-Federal Reserve policy meeting atmosphere.
“Gold is most likely going to be range bound. The markets are looking very closely on what could actually come out from the G7 meeting,” said OCBC analyst Barnabas Gan.
“The market is also looking for a potential rate hike by the FOMC … [but] the dollar movement will dictate how gold will move into the next one week or so,” he added.
Generally, the yellow metal is highly-sensitive to rising interest rates as they tend to boost the dollar, putting pressure on bullion. However, if the markets react the way they have during the last two Fed hikes, gold prices should edge up following the decision. Unlike gold, silver made gains throughout the week and remains on track to increase by 2 percent.
“Silver has found interest underneath US$16.70 and will target a further leg higher,” noted
the Asian trading team at Swiss refiners MKS Pamp.
As of 9:38 a.m. on Friday, the white metal was trading at US$16.75 an ounce. Silver held its ground despite the world stock markets falling ahead of this weekend’s G7 summit in
Canada, set for a confrontation over the worsening ‘trade war’ between US President Trump and the other six developed-nation leaders.
Rounding out the week in metals is copper, which hit a 4.5 year high over concerns that
wage negotiations at the world’s biggest copper mine could hinder on supply.
“[Investors] continue to fret about potential supply-side disruptions after union leaders at Escondida which is operated by BHP (ASX:BHP,NYSE:BHP, LSE:BHP), submitted wage demands, sparking fears of a possible strike,”
The base metal was tra ding at US$3.28 per pound as of Friday at 10:07 a.m. EST.
Meanwhile, oil prices dipped following weaker demand in China and surging
US output, which has weighed on the markets, even despite the supply troubles in Venezuela and Iran on top of OPEC’s production cuts.
OPEC leaders are expected to meet in Vienna on June 22 to discuss reversing the production decrease that removed 1.8 million barrels per day from the global market. The oil-rich nations will also discuss ramping up production.
“This discussion about possible OPEC supply increases after the June meeting has put a brake on the oil price for th time being, so US$80 is a big hurdle to overcome,” Commerzbank (OTCMKTS: CRZBY) strategist Carsten Fritsch said
“It’s crazy and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran’s exports due to their illegal sanctions,” Iran’s OPEC governor stated. As of 10:25 a.m. EST, oil was sitting at US$66.05 per barrel.
This article provided by NewsEdge.