Gold’s spot price rose by 2% on July 3, putting the precious metal on track for its first weekly gain in a month. In late trading heading into the weekend, gold was trading at $4,187.30 an ounce, up about 3% over the past week. That marks the first weekly increase for the yellow-colored metal since the end of May.
Gold has seen its price decline this year amid worries about persistent inflation, a stronger U.S. dollar, and the potential for interest rates to rise in this year’s second half. Gold posted its worst quarter in 13 years between April and June. Even with the bump to start July, gold’s price remains down 22% from an all-time high of just over $5,300 an ounce reached in January of this year.
Lower Crude Oil Prices
Gold is starting to rebound as lower crude oil prices are expected to lead to a decline in inflation and take pressure off the U.S. Federal Reserve to raise interest rates. A weak U.S. jobs report also gives the central bank leeway to leave interest rates at current levels or potentially lower them if inflation declines sharply in coming months.
Futures traders are currently pricing in a 53% chance that the Fed raises interest rates by 25-basis points in September of this year. That’s down from 65% only a week ago. Gold is not the only metal whose price is rising to start the third quarter. Silver, which is both a precious metal and an industrial metal, posted a weekly gain of 6.7%, taking its price up to $62.82 an ounce.
