Gold Price Puts Together Small Gain in Face of Strong Dollar
New York (Oct 22) In spite of the continued surge of the US dollar, gold is eking out a gain on Friday, thanks to regular trading activity. The dollar dragged gold down by 0.35% and regular trading pushed it up about 0.55%. Silver was more or less in the same boat and both leading precious metals inched up marginally to end the week.
The dollar was up about half a percent against the euro; the two big currencies matter most when it comes to gold prices. Today’s jump in the dollar represents an eight-month high. The greenback was down against the yen but up compared to the British pound and Swiss franc.
Oil moved higher, mostly on comments by the Russian oil czar who seemed to lend support (again) to production controls. West Texas Intermediary closed up 1.00% on the week (at settlement today), or $50.85 per barrel.
But of course, there is a dark side to the moon. And we have been consistently discussing it. A carefully watched report from oil services firm Baker Hughes showed the number of active U.S. oil rigs rose by eleven this week. We marked the seventeenth week without a decline in the rig count.
The last time U.S. oil rigs rose by ten or more was two months ago, when there were fifteen add-ins during the week of August 15 and ten in the week of August 19. At the time, U.S. crude prices ranged between $44 and $48. So, we are roughly 10% higher from those big days of new or re-activated rigs.
Higher oil wasn’t enough for stock traders as earnings reports muddled the pictures and markets were on tenterhooks over what it believes will be an interest rate hike come December.
The Dow Jones industrial average is off about ten points in afternoon trade after momentarily dropping more than one hundred points. IBM and Johnson & Johnson contributed the most in losses, offsetting strong gains from Mickey D’s and Microsoft.
Up and down the line, U.S. bond yields stayed steady on Fed rate uncertainty. The 10-year yield remained below 1.74%.
Source: KitcoNews
