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Gold rallies to score first weekly gain since early July
U.S. dollar extends losses after Fed’s Powell speech
Gold prices punched higher Friday to score their first weekly advance in seven weeks as the U.S. dollar extended losses in the wake of a closely followed speech from Federal Reserve Chairman Jerome Powell.
The U.S. dollar weakened sharply, providing support for dollar-denominated gold prices, as
Powell, at the annual Fed symposium in Jackson Hole, Wyo.
, said gradual U.S. interest-rate hikes remain appropriate and there was no risk to the economy overheating. He also said he was prepared to do “whatever it takes” if inflation becomes unanchored to the upside or downside “or should crisis threaten again.”
“The dollar giveth and the dollar taketh” and with the pullback in the U.S. dollar index Friday, “gold is soaring,” Michael Armbruster, managing partner at Altavest, told MarketWatch.
Against that backdrop, December gold
added $19.30, or 1.6%, to settle at $1,213.30 an ounce—for its highest finish in three weeks and largest one-day percentage climb since March, according to FactSet data based on the most-active contract. Gold also saw a gain of about 2.5% for the week, after posting six weeks of losses in a row.
Gold gained as a leading dollar index
fell 0.5%. The popular measure of the buck against six rivals was down 1% for the week,
. It’s still up 0.7% for August so far as rising interest rates increase the opportunity cost of holding nonyielding gold, while boosting the dollar, in which gold is priced.
Why gold has performed so poorly even though stock markets are volatile
Explaining the dollar’s weakness Friday is “difficult as odds of a December rate hike have actually increased slightly after Powell’s Jackson Hole speech,” said Armbruster. “Trade tensions have not eased either.”
Still, he said the dollar may be weakening on the back of all the negative headlines surrounding President Donald Trump.
How to know if stocks would really crash if Trump were to be impeached
On the sidelines of the Jackson Hole event, St. Louis Fed President James Bullard on Friday told CNBC that
and wait for developments before raising rates any more. Gold held its gain after the Bullard interview.
Economic data released early Friday showed a jet-led drop in durable goods orders, but
—data seen as backing the Fed’s case for tightening rates further this year. What Is The Price Of 1 Dollar
Gold prices rose even as stocks looked to finish at fresh records. The Dow
S&P 500
and Nasdaq Composite
What Is The Price Of 1 Dollar
Meanwhile, some analysts eyed market mechanics in making their next call for gold.
Net speculative positioning in gold declined significantly, currently at a 15-year low, according to Commodity Futures Trading Commission data. Net speculative short positions, or bets an asset’s price will fall, in gold are up 275% year to date, which means investors are now short just over 215,000 contracts of gold or nearly 21.5 million ounces of gold, the agency’s data shows.
“We have seen gold do well following previous spikes in short interest,” said Shree Kargutkar, portfolio manager at Sprott Asset Management. “With over $25 billion of gold being shorted, any meaningful short covering should produce a significant price appreciation in gold.”
climbed 25.2 cents, or 1.7%, to $14.794 an ounce after skidding more than 1.4% in the previous session. It was up 1.1% for the week.
“Suffice it to say that silver supply is tight,” said Sprott’s Kargutkar. “There are no mines scheduled to come on in the next year or two which would increase annual silver output by anything close to 450 million ounces. Unless an asteroid carrying half a billion ounces of silver lands on earth, we believe the shorts are playing a dangerous game with little to gain.”
Among other metals, high-grade copper for September delivery
rose 4.6 cents, or 1.7%, to about $2.701 a pound, up around 2.7% on the week. October platinum
rose $11, or 1.4%, to $789.40 an ounce, for a weekly rise of 1.6%, while September palladium
added $17.40, or 1.9%, to $928.60 an ounce, What Is The Price Of 1 Dollar
Among exchange-traded funds, SPDR Gold Shares
added 1.8%, trading just under 2% higher on the week.The VanEck Vectors Gold Miners ETF added 3.6%, poised for a weekly rise of 2.1%.
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albeit carefully What Is The Price Of 1 Dollar , albeit carefully
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