Gold Futures Enjoy Gains In Front Of General Uncertainty This Week

Friday 21th closed the second week in a row where gold futures enjoyed gains. Basically, this week was defined by a few cents up but nothing more. Despite this minor gain, experts can identify a positive trend for the precious metal, affected by general uncertainty in most markets due to the political panorama.

According to a Market Watch report, gold futures is taking advantage from the FED’s next interest rate hike and the complex scenario in the US politics. With elections within a couple of weeks and two unpopular candidates fighting each other for the seat at the White House, both US and foreign investors are questioning if their money if safe in stocks or other commodities, way more fragile in comparison with gold.

The Numbers

2016 has been an outstanding year for the yellow metal. Gold futures are enjoying a steady rise, earning one point or two each week that passes. The recent ones weren’t the exception.

December gold went up 20 cents of US Dollars, ending at US$1,267.70 per troy ounce. This represents a relevant gain in comparison with previous numbers, like an early US$1,262.

Also, the ICE US Dollar Index enjoyed a 0.5 percent rise on Friday. This index measures the US Dollar against the most relevant currencies in the Forex markets. This is an interesting fact because is not common to see both cash for gold factors, those being gold and the US Dollar, going up at the same time. They often go in different directions, so we should pay attention to indicators.

The FED and US Elections

The imminent threat of Donald Trump getting the White House is terrifying for many investors who have interest on the US currency. So far, isn’t quite clear how Trump would handle FED policies.

There are solid theories that support an interest rate hike this upcoming December but this can easily change if the new president decides something else regarding monetary policy.

Nevertheless, the US Dollar is still winning territory. The European Central Bank recently decided to keep the actual monetary policy the way it is, triggering Euro losses in front of the Dollar. It seems like this movement from EU authorities also had an influence on gold future, which gained value as well.

Experts think that gold future will enjoy a slow but steady gain until the US elections. Uncertainty is bad for the markets, so many investors could be betting on a safer alternative right now, probably backing up their money with metal.

Other Metals’ Fate

Despite all the factors that are in favour of strong commodities, other metal indicators aren’t enjoying the same luck as gold futures. December silver, for example, was down 5.6 cents or 0.3 percent.

The same history for December copper, January platinum, and December palladium, all metals losing points during this past week. Copper was down 1 percent, platinum 0.3 percent, and palladium 1.9 percent.

The upcoming weeks could be decisive for gold futures, getting closer and closer to US elections. The outcome of this event could be changing the financial panorama entirely, so many investors could have more interest on safer bets than never before.