Gold hits six-week high due to multiple factors

UNITED STATES June 07 2017 10:15 AM

NEW YORK (Scrap Register): Multiple factors have pushed gold prices to a six-week high, said Commerzbank. 

As of 8:15 a.m. EDT, spot metal was up $11.40 to $1,290.45 an ounce and peaked at $1,293.70, its most muscular level since April 17. 

Commerzbank said Middle East tensions are one supportive influence, with Saudi Arabia, Egypt, the United Arab Emirates and Bahrain cutting diplomatic ties with Qatar, with Qatar accused of supporting terrorism. 

“What is more, the U.S. labor market data came as a disappointment on Friday, which dampened expectations of Fed rate hikes,” Commerzbank added.

After a rate hike that is still widely expected next week, only one more rate hike by the end of 2018 is priced in by the Fed fund futures. 

In response, the U.S. dollar dropped on a trade-weighted basis to its lowest level in seven months, as did yields on 10-year U.S. Treasuries. 

Furthermore, key events are taking place this Thursday: the ECB’s meeting, the general elections in the United Kingdom, and the hearing of former FBI Director James Comey before a Senate committee.