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Gold Price Sinks on Strong Dollar

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Gold Price Sinks on Strong Dollar

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A rebound for the U.S. dollar helped push gold prices lower when markets opened on Monday, as the precious metal all lost ground in early trading. Spot gold fell below $1,230 an ounce after losing 1%, while spot silver tumbled even farther, losing 2% to slip below $16.30/oz.

Platinum and palladium gave up 1.7% and 0.6%, respectively.

Friday Recap

For reference, here are Friday's closing numbers across the markets:

Gold: $1,241.20/oz ($-4.20, -0.34%) Silver: $16.60/oz (+2¢, +0.12%) Platinum:  $924/oz (+$6, +0.65%) Palladium: $840/oz (-$7.00, -0.83%)

WTI: $46.33 (+$1.40, +3.12%) DXY: 95.64 (+0.08, +0.09%)

DJIA: 21,349.63 (+62.60, +0.29%) NASDAQ: 6,104.42 (-3.92, -0.06%) S&P 500: 2,423.41 (+3.71, +0.15%)

Monday Morning Markets

Although a mixed performance has been the norm of late for the precious metals, the action in the foreign exchange markets seemed to get the metals back in formation, as all four moved in the same direction—lower—on Monday.

The dollar tumbled 1% last week alone to cap off a first half of 2017 that saw the greenback shed more than 5.5% of its value. This has been a boon for other major currencies like the euro, pound, and yen. However, the dollar rebounded 0.45% on the DXY index this morning, crossing back above the 96.0 level.

Stock futures in the U.S. pointed higher on Monday after a choppy performance to close out the second quarter on Friday. The Nasdaq led the way 0.5% higher in early trading while the Dow and S&P were up about 0.3%. Treasurys continued to sell off, as the 10-year yield rose to 2.30%. This is more than 15 basis points higher than where the 10-year T-note yield stood just a week ago.

Shares gained overnight in Asia on the news that China is now opening up its bond market to foreign investors. This comes ahead of the big G20 summit where leaders of the world's 20 largest economies will meet. This gathering will be the first face-to-face meeting between President Trump and Russian President Vladimir Putin.

Oil prices were higher again on Monday, as WTI crude and Brent crude each added about 1%. These oil benchmarks have made a huge jump from where they closed last Monday as they chart a week-long rally. Baker Hughes reported the first drop in U.S. oil rigs (two less) in 24 weeks, as the last time the rig count dropped was in January—six months ago. The prospect of less drilling in the U.S. is also helping push oil prices higher.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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