Gold Futures Post Fourth Consecutive Weekly Advance: Gold Coins Join Rally
Gold futures closed higher on Friday as oil prices plunged over the week, and posted a weekly advance for the fourth-straight time as investors’ desire for safe haven investments overshadowed expectations for a December US interest rate hike.
The renewed interest in buying gold as a safety net ahead of the US federal election also spilled over into the gold coin market, with premiums on all the major coins rising compared to a week ago. Premiums on American Gold Eagle coins rose to $58.60, up from $57.06 last Friday; premiums on Canadian Maple Leaf coins rose to $45.58 up from $44.41 a week earlier and premiums on American Buffalo coins rose to $59.90, up from $58.33.
Gold futures ended Friday’s session modestly higher, but over the week they appreciated by 2%. Gold is now holding above $1,300 per ounce. The US election is scheduled for next Tuesday, and either way the outcome could spark increased demand for safe haven investments such as gold. Both Hillary Clinton and Donald Trump are expected to bring some uncertainty to the political and economic fate of the world’s largest economy. However, a Trump victory is seen as more risky when it comes to future policies; therefore, if Trump wins gold could prices would appreciate further than if Clinton is victorious.
While the election is stealing the spotlight, the timing of the next US rate hike is falling into the background. This is because even though investors are banking on a December rate hike, if there is economic fallout from the new leadership in the US the Fed may decide to delay its widely expected rate hike. Still, economic data and the commentary from the Fed meeting released this week were supportive for a December interest rate increase.