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Gold Futures Close at the Lowest Price Since July 2017

Commentaries & Views

Gold futures closed lower on the week, losing value for the third consecutive week. More foreboding is the fact that not only has gold closed at the lowest value this year, but the last time gold futures closed near this level was almost a year ago.

During the week of August 26, 2017, gold futures closed at $1,210 an ounce, and then opened at $1,211 the first week of July 2017. Gold would gain value up until September 2017, when it reached its highest price value of the year, closing on a weekly chart at $1,351 after reaching a high that week of $1,362. Gold pricing would decline during the last quarter of 2017, until the week of December 11 which marked the beginning of a rally which would take gold pricing almost $130 higher.

Gold pricing would flirt near the yearly highs from January to April of this year, trading to a low just above $1,300, and challenging the highs on three occasions above $1,360 per ounce. During the week of April 9, gold prices traded to the highest point before dollar strength began to pressure gold pricing. This marked the beginning of a correction that continues to this day.

Last week gold closed at a new weekly low for the year. On Thursday of last week gold traded to a low of $1,211. If not for statements and tweets President Trump made during that day gold prices could have drifted much lower.

Last Thursday the president spoke about his dissatisfaction with the current monetary policy of the Federal Reserve, and the leadership of Jerome Powell in an interview with CNBC. This was followed by a tweet the president sent a week ago Friday in which he tweeted “the United States should not be penalized because we are doing well. Tightening now hurts all that we have done. The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD trade deals. Debt coming due & we are raising rates. Really?”

His statements made last Thursday during the CNBC interview and subsequent tweets moved the dollar index almost a full percentage point lower thereby causing gold to move from its low of $1,211 back to $1,231 by the close of trading on Friday of last week.

The dollar recovered and gained value this week. However, the dollar had fractional losses today even in light of the U.S. economy having its strongest quarter in nearly 4 years. The U.S. government reported a GDP that grew at a 4.1% annualized pace in the second quarter, dwarfing the revised 2.2% GDP growth during the first quarter of this year.

The strong GDP reported could certainly strengthen the dollar next week thereby putting continued pressure on gold prices.

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Wishing you as always, good trading,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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