Gold And Silver Could Snap Longest Losing Streak In Months As Metals Remain Volatile

Topline

Gold and silver are making gains Friday morning, the first time in nearly a week the precious metals haven’t shed value, potentially marking an end to their longest losing streak in months, though both metals are expected to remain volatile amid the Iran war and expectations of future interest rate hikes.

Key Facts

The price of silver is about $67 as of 9:30 a.m. EST Friday morning, up nearly 5%, though silver hit an intraday high above $68 earlier in the morning.

Gold is also up nearly 3% to $4,223.70 as of 9:30 a.m. after hitting a high of $4,267.80 earlier in the session.

Gold and silver declined for five straight sessions as of Thursday, the Wall Street Journal reported, which the Journal said marked their longest losing streaks since late March, suggesting the metals could snap this streak Friday.

Analysts at Saxo Bank attributed the metals rally to President Donald Trump cancelling planned strikes on Iran on Thursday and claiming that a peace deal to end the war, which has generally caused metals prices to decline, is close.

Oil prices fell after Trump called off the Iran strikes, also a boon for metals, as gold and silver have generally traded inversely with oil throughout the Iran war.

Gold and silver are expected to remain “vulnerable,” analysts at Sucden Financial said Friday, noting a firm dollar has put downward pressure on metals while the market remains “sensitive to both Fed communication and Middle East headlines.”

contra

Despite Friday’s gain, gold is still on track for a weekly decline of 7%, the Wall Street Journal reported, which would be the metal’s second weekly decline in a row. Metals fell to their lowest levels in months this week, with gold touching a six-month low on Thursday, as analysts largely attributed the decline to expectations the Federal Reserve will hike interest rates, which generally causes metals prices to dip. “Gold prices are moving in line with statements from the U.S. President, but the overriding influence remains inflation, with markets expecting rate hikes from the ECB and also anticipating that the Fed will follow,” Quantitative Commodity Research analyst Peter Fertig told Reuters on Friday.

what to watch for

Whether the Federal Reserve will raise interest rates. The Fed is set to hold its first policy meeting next week with Kevin Warsh, Trump’s pick to lead the central bank, as its chair. Warsh has faced pressure from Trump to cut rates, though economists have said inflation pressures will most likely cause the Fed to keep rates steady next week, though rates could rise later in the year.