Metals: Gold Falls Despite Political Tremors

By David Hodari Features Dow Jones Newswires

The price of gold fell for the third day in a row on Friday, selling off from its early week highs as the dollar strengthened and political events around the world failed to motivate haven buyers.

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Gold for August delivery fell 0.8% to $1,269.50 a troy ounce on the Comex division of the New York Mercantile Exchange, on track to hit a fresh one-week low.

Copper for July delivery, meanwhile, rose 0.9% to $2.6335 a pound in New York, as supply-side problems in South America and Indonesia continued to boost prices.

Investors had been pricing in risk surrounding former-FBI Director James Comey 's Senate committee testimony, the European Central Bank's rates decision, and the U.K. general election, all of which took place Thursday.

Of those three events, traders had guided for most risk around events at the Senate committee meeting, but neither Mr. Comey's appearance nor the ECB decision yielded many surprises, according to ETF Securities's Nitesh Shah.

"Comey didn't reveal any smoking guns or anything shocking that the market didn't already know about," Mr. Shah said.

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The U.K. election did surprise, though, with an inconclusive result dashing Prime Minister Theresa May 's hopes for an increased majority and leaving the nation with a hung parliament.

That result -- and the drop in the British pound versus the dollar that followed -- brought benefits to U.K. gold-mining companies, but not gold prices themselves.

"On a global scale, the U.K. elections aren't driving gold prices to the extent you'd see safe-haven buying," Jefferies analyst Alan Spence said.

A stronger dollar also played its part in a lower gold price. The WSJ Dollar Index, which measures the dollar against a basket of currencies, on Friday rose 0.5% to 88.62.

Investors were already looking to next week's meeting of the Federal Open Market Committee on June 14, where the Federal Reserve is expected to raise interest rates, a move which would likely buoy the dollar and take gold further away from its most recent highs.

Stephanie Yang contributed to this article.

Write to David Hodari at

(END) Dow Jones Newswires

June 09, 2017 11:28 ET (15:28 GMT)