Gold and SIlver both closed lower on Friday as the US Dollar witnessed a late spike, ending a two-session losing streak.
Gold and SIlver started Friday with small gains, fueled by political uncertainty in France. Safe haven assets such as Gold spoke after the release of a report indicated that the two main left-leaning candidates in France’s presidential election, Jean-Luc Melechon and Benoit Hamon are contemplating the possibility of partnering together.
However, in relatively quiet trading, investors shrugged off continued European political uncertainty and a fall in optimism surrounding a possible interest rate rise in March.Gold and Silver have been under pressure in the week following a rise in optimism for a March interest rate rise. The increased optimism came after Federal Reserve Chair Janet Yellen gave a hawkish tone in her two-day testimony to congress.
Despite Gold ending with a loss on Friday, the precious metal still registered a third straight weekly gain. The gains follow global political uncertainty fuelling safe haven demand. The political uncertainty has not been helped by the unpredictability of President Donald Trump. His promised tax cuts have boosted US Stocks to an all-time high, but with each tweet or press conference, the President of the world’s largest economy sends shockwaves around the world.
Investors moved more and more into the US Dollar as the day progressed. Gold and the US Dollar normally trade inversely to each other. When the US Dollar strengthens, dollar-priced commodities such as Gold and SIlver become more expensive investment and less attractive.
Gold closed Friday down 0.46%, or $5.75, with a troy ounce trading at $1235.85. Silver ended Friday down 0.54%, or $0.097, with a troy ounce trading at $17.977. Meanwhile, the US Dollar Index which measures the greenback against a basket of six weighted currencies, closed Friday up 0.44%.