The gold price fell on Friday due to a stronger dollar, and a rise in Treasury yields.
Gold prices, despite trading in the red last Friday, were still on course to make some modest weekly gains.
Gold will be up for the third week in a row.
Due to the risk of supply, other precious metals like palladium have extended their gains from previous sessions.
Copper futures at the London Metal Exchange dropped by half a percent among industrial metals.
Demand for gold is backed by the safe-haven market
Gold prices may be down but the yellow metal remains strong due to geopolitical tensions, and the uncertainty surrounding the US Presidential election.
The Middle East has seen a rise in gold flows as tensions escalate.
Reuters reported Friday that three Lebanese reporters were killed in a bombing at a guesthouse where members of the international media stay.
It comes during US Secretary of state Anthony Blinken’s visit to Doha where he will meet with representatives from Israel, Qatar and Qatar.
Osama Hamdan, a senior Hamas official, told the pro-Hezbollah Lebanese news agency Al-Mayadeen that there had been no change to Hamas’ position.
The most active December gold contract at COMEX is $2,741.60 an ounce. This is down 0.3% from its previous close.
US election keeps traders on toes
The news that Donald Trump, the Republican candidate for president, is making progress in his fight with Vice President Kamala Harris is another development in the Middle East.
Trump has reportedly surpassed Hillary Clinton in states like Wisconsin and North Carolina.
Joaquin Monfort of Fxstreet.com wrote in a report that “this suggests he has good chances to win the US Presidential election.”
Monfort stated that a Trump victory would disrupt the geopolitical system and increase the number of safe-havens despite Trump’s claims to have ended conflicts in just a few days.
Dollar strength causes copper to fall
The copper price on the LME dropped on Friday and was set to fall for a 4th consecutive week.
The stronger the dollar, the more expensive commodities are for those who hold other currencies. This reduces demand.
Copper traders also doubted if China’s recent stimulus measures would be able to boost demand for red metal in one of its top consumers.
According to Reuters, a meeting of China’s National People’s Congress that was to provide further clues on stimulus policies has been postponed from late October to November.
The three-month contract for copper on the LME at the time this article was written, was $9,533.50 a ton, down by 0.4% compared to the previous close.
Palladium increases gains
Palladium futures contracts rose on Friday for a second consecutive trading day as fears about supply lifted sentiments.
Sources say that the US government will be calling on the G7 countries to impose sanctions against Russian palladium.
The price increase is a result of this.
On Thursday, the palladium contract at the New York Mercantile Exchange rose up to 9% in some instances. It reached its highest level since last December. Prices are currently 0.4% higher, at $1,168 an ounce.
According to Commerzbank AG, Russia is the dominant player on the palladium markets, with one company providing 40% of world mine supplies.
Barbara Lambrecht is a commodity analyst with Commerzbank. She wrote in a recent note:
In 2021, the EU, which imports around half of its palladium imports, received about a third from Russia.
It is possible that the share has declined but will likely remain significant.
This post may be updated as new information is revealed.
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