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Gold and Silver Weaker on August 19 amid Interest Rate Speculation

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Gold and silver weaker on August 19

After starting the day on a subdued note, gold and silver remained weaker throughout the day amid a recovery in the US dollar. At 3:00 PM EDT on Friday, August 19, the COMEX gold futures contract for December delivery was trading at $1,347.45 per ounce, a drop of ~0.72%. The silver contract for September delivery was trading at ~$19.34 per ounce, a drop of ~2%.

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Comments from Fed officials weighs on market

The comments made by two of the Fed officials on the timing of an interest rate hike weakened the sentiment in the gold market on Friday, August 19. William Dudley, the president of the Federal Reserve Bank of New York, commented on Thursday, August 18, supporting the gradual increase in interest rates—preferably sooner rather than later.

Before the release of July’s Federal Reserve meeting minutes, Dudley commented on Tuesday, August 16, that the Fed could increase interest rates as soon as September. The president of the Federal Reserve Bank of Atlanta, Dennis Lockhart, expressed his confidence in US economic growth, the prime factor that decides the timing of an interest rate hike.

These comments weakened the sentiment in the gold market as an increase in interest rate took the shine out of gold. In addition to this, the recovery of the US dollar on Friday, August 19 weighed on gold prices. The stronger dollar weighs on dollar-denominated commodities like gold and silver. Please read Why Are Copper, Gold, and Silver Weaker Early on August 19? to see how metals traded in the early hours of August 19.

At 3:20 PM EDT on Friday, August 19, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) fell by ~2.1%, ~0.68%, ~4.2%, and ~1.4%, respectively. The SPDR Gold Trust ETF (GLD) fell by ~0.7%.

The final article in this series explains the performance of companies in the energy, metals, and mining sector on Friday, August 19.

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