Gold Price Slips, Further ETF Outflows, as Dollar Firms on Fed Rate-Hike Call, Crude Oil Rising

The GOLD PRICE in Dollars slipped to $1345 per ounce on Friday at noon in London from a weekly high of $1358 on Tuesday, a level last seen two weeks ago, writes Thomas Podvin at BullionVault.

The metal however has still added 0.7% on the week so far, as the US currency strengthened and crude oil prices rising.

The US main indices finished higher on Thursday as did the Japanese Nikkei today. The Chinese Hang Seng was down. The main European stock exchanges were all trading down this afternoon.

US crude oil prices rose above $48 a barrel and were set to finish the week with the largest weekly gain in six months. 

The Euro versus Dollar exchange rate was $1.131 on Friday afternoon, a level last reached end of June erasing a near 2-month drop on Friday morning. The £/$ cross rose this week after the post-Brexit referendum multi-years fall, but was still hovering under the $1.33 level. 

The Dollar index rose while a Fed official indicated that the US economy was able to stand another interest increase soon. 

San Francisco Fed President John Williams said that it made sense to get back to an increase "sooner rather than later" on Thursday. 

While the FOMC minutes released on Wednesday showed a split between policymakers regarding the rate hike timing, “The Fed could potentially move in December," Roger Bridges from Nikko Asset Management in Sydney told Bloomberg, adding that "with uncertainty about U.S. inflation and monetary conditions around the rest of the world, the pace will be extremely measured.”

Investors will be looking for more hints when central bankers meet at Jackson Hole on August 26th, the chances for a rate hike this year stayed at 47%.

"The main factors weighing on the price are presumably the somewhat firmer US dollar and further [gold] ETF outflows of 1.3 tons," said Frankfurt Commerzbank in a daily note, pointing also to a comment by New York Fed President in favour of a hike. 

The ETF SPDR Gold Trust (NYSEArca:GLD) shed a further 1.8 tonnes on Thursday leaving total holdings standing at 956 tonnes, with outflows so far this week reaching 4.5 tonnes.

In contrast with the Dollar price, gold for Eurozone and British investors showed a double digit loss on the week at Friday midday and was set for a drop from July's multi-years peaks of 4.6% and 4.2% respectively.

UK economic indicators for July published this week were as good as expected or even better, as the retail sales rose 1.5%, the jobless number dropped despite the expectations of an increase and the inflation rate did not surprise the market.

"Shoppers shrug off Brexit gloom," wrote the Financial Times despite the Brexit hit on business sentiment.

The year-on-year UK Core Consumer Price Index of July slightly decreased from June at 1.3%, a level not deviating from the general consensus figure, shown by statistics published on Tuesday.

Platinum prices eased back as did the silver prices in Dollars set to close the week 1.42% lower at $19.43 per ounce, a 4-week level already breached once this week on the way down.

In Rio 2016, while Team US medal tally reached 100, team GB ranked second with 22 gold medals out of 56, currently 9 fewer than in London 2012 Olympics. See BullionVault's infographic on the medal count for 120 years of Olympics here.