Why Did Gold Lose Some Luster on Friday, September 9?



Gold and silver weaker on Friday, September 9

After declining for two consecutive trading days, gold was weaker on Friday, September 9. At 2:00 PM EDT on Friday, the COMEX gold futures contract for December delivery was trading at $1,335.05 per ounce, a drop of ~0.5%.

The COMEX silver contract for December delivery was trading at ~$19.33 per ounce for a loss of ~1.8%.

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Comments by Fed policymaker weighs on gold

On Friday, September 9, Eric Rosengren, the president of the Federal Reserve Bank of Boston, commented that he supports the gradual increase of interest rates. He added that delaying the timing would be risky to asset markets like real estate. Rosengren’s hawkish comments weighed on gold prices.

On September 9, the chances of an interest rate hike in September, November, and December 2016 stood at 24%, 28.7%, and 59.3%, respectively. Although Rosengren didn’t mention the timing of a potential interest rate hike, his comments supporting a hike gave a push to US dollar and pressured gold prices. The firmer dollar weighs on dollar-denominated commodities such as gold, silver, and copper.

Gold and silver started the day on a weaker note and moved lower as the day progressed. Please read Copper, Gold and Silver Eased in the Early Hours on September 9 to see how metals traded in Friday’s early hours. Please refer to What You Can Learn by Reading Gold and Silver Technicals for an analysis of the technicals for gold and silver.

At 2:25 PM EDT on Friday, September 9, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) fell by ~5.6%, ~5.2%, ~5.6%, and ~5.1%, respectively. The SPDR Gold Trust ETF (GLD) fell by 0.57%.

The final article in this series explains the performance of companies in the energy, metals, and mining sectors on Friday, September 9.


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