Gold Price

Gold Coin Premiums Advance As Gold Futures See Daily, Weekly Decline

Written by Economic Calendar     August 19, 2016    

Gold futures fell on Friday, capping a week of oscillating values, as traders adjusted to fluctuating opinions on the future pace of US benchmark interest rate increases.

Gold futures fell on Friday, capping a week of oscillating values, as traders adjusted to fluctuating opinions on the future pace of US benchmark interest rate increases.

When the Federal Reserve ended its two-day meeting, it released the FOMC meeting minutes this week, which showed discord among Fed members as to the timing of the next rate hike. But, in the aftermath of the meeting some Fed speakers expressed economic optimism and at the same time the concern of waiting too long to increase interest rates.

On Friday, gold futures ended only modestly lower, down 0.8% at $1,346.20 per ounce but it was the commodity’s largest daily decline since Aug. 5. Over the course of the week, gold gained roughly 0.2%. Of note, gold closed below the key $1,350 per ounce support level, which could mean that it will be subject to fresh selling pressure on Monday when markets reopen.

When it comes to physical gold assets, gold investors are holding interest. This week in the gold coin market, American Gold Eagle coin premiums were higher, on Friday premiums were $60.85 over spot gold, an increase since last week when investors seemed more convinced that a rate hike would happen this year. Of the major gold coins, American Buffalo coins were fetching the largest premiums this week, of $62.20 over spot gold on Friday.

Gold did not garner as much interest as expected following a big decline in the value of the US dollar this week. The ICE US Dollar Index lost over 1% this week. While that should have encouraged more interest in the metal from holders of international currencies, the interest was muted with all focus on the Fed.