Why does gold struggle to lock a weekly gain?

Why does gold struggle to lock a weekly gain?

Gold prices rose for a second straight session on Friday, doing attempts to lock its first weekly gain in four on political concerns in the United States after the firing of FBI Director.

As of 11:37 GMT, gold traded higher at $1228 an ounce after hitting a peak of $1229.82, while it opened the session at $1224.40. 

U.S President Donald Trump on Thursday refused allegations that his firing to Federal Bureau of Investigation Director Comey is a "showboat."   

Top U.S. senators and acting FBI Director Andrew McCabe have vowed to resume investigations concerning ties between Trump’s Presidency campaign and Russia. 

The yellow metal also took advantage of the dollar’s retreat from a high of 99.76 the previous session to hover around 99.50 today.

Crude oil is set for its first weekly advance in four, where it is currently trading at $47.85 a barrel. 

Yet, the metal’s rally ran out of steam as upbeat German growth data improved investors’ mood and gave support to equities. 

Gold may face pressure in the coming period amidst rising bets the Fed would raise interest rates in June after the release of upbeat data this week.

U.S. producer prices rose more than forecast April, pointing to a possible rise in inflation, ahead of CPI data due later in the day.

The consumer prices index may show a 0.2 percent gain in April, following a 0.1 percent drop in March.

Initial jobless claims fell by 2,000 to 236,000, compared to forecasts of a rise to 245,000, giving more support to policymakers to raise interest rates next month.

Eyes will watch G7 finance chiefs meeting this weekend, as it will include discussions on important issues such as trade and currencies.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

You have to be logged in to comment.