Gold prices ended the week down 0.22 percent at $1,229.19 per ounce. The yellow metal was on the rise early in the week, but fell Thursday as the US dollar rose.
According to the Wall Street Journal, European Central Bank President Mario Draghi commented that there could still be interest rate cuts on the horizon in Europe, weakening the Euro against the dollar. Favourable unemployment data from the US also gave a boost to the greenback.
According to Reuters, Goldman Sachs sees a higher US dollar continuing to put pressure on gold. “We continue to expect that the strengthening of the U.S. labour market will force the Fed to hike rates three times this year, which will lead to a stronger dollar and a gradual increase in U.S. real rates, pushing gold down,” the firm told the news agency.
However, the strong dollar didn’t put quite as much of a damper on the silver price, as the white metal finished the week up 4.41 percent overall. Silver prices were trading around $16.96 per ounce by Friday at 1:49 p.m. EST. The metal hit an 11-month high on Wednesday, but some analysts are hesitant that silver’s upward momentum could continue.
“For silver, we favour the market above $17, but expect volatility and further gains may be hard to hold,” HSBC analyst James Steel told Reuters. “On the positive side, it appears that solar-panel demand is up and retail demand is solid for silver.”
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On the base metals side of things, comex copper prices surged 3.83 percent to $2.28 per pound for the week. Increased optimism over China’s economy continued to give a boost to the red metal, as the country reported record copper imports for the month of March.
Furthermore, while the prospect of interest rate cuts in Europe might have put pressure on the gold price, George Gero, managing director at RBC Wealth Management, told the Journal that the news was good for copper. “Dr. Copper and crude like the idea that interest rates remain the same in Europe,” he said.
Finally, as mentioned above, oil prices saw a bit of a boost this week, with Brent Crude futures rising 1.1 percent to $45.02 per barrel by 1:37 p.m. EST. As per Reuters, market sentiment is improving, with oil prices recording their third straight week of gains, US consumption improving, and signs that oversupply could be on the decline.
However, not all market watchers believe that oil is out of the woods yet. “While this recent rally has the potential to run further to the upside … we believe that it is not yet driven by a sustainable shift in fundamentals,” Goldman Sachs was quoted as saying in a note to clients.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
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