- Gold price suffers worst weekly drop in three years as investors tilt toward risk-on assets.
- December gold futures are hovering around $1,465/oz, the lowest in over three months.
- Despite the fall, the Federal Reserve’s ‘war on savings’ will keep gold prices trekking higher over the long haul.
The price of gold is plunging this week by the most in three years – a knee-jerk reaction to the U.S. stock market’s record-breaking surge.
Bullion’s steep selloff comes after major banks and precious-metal manipulators Citigroup and JPMorgan cut ties to the traditionally haven asset on the belief that a U.S.-China trade deal will push equities even higher.
Gold Price: Worst Weekly Performance in Three Years
Gold for December delivery, the most actively traded futures contract, plunged by as much as 3.7% this week. The worst weekly slide since the aftermath of the 2016 presidential election came as the United States and China headed toward an interim trade deal – or so investors thought.
The yellow metal was last seen hovering around $1,465.00 a troy ounce on the Comex division of the New York Mercantile Exchange. At the start of the week, it was testing the $1,520.00 range.
Gold’s steep correction drags prices to three-month lows. | Chart: barchart.com
Silver prices plunged in lockstep with gold, as the grey metal bottomed at $16.66 a troy ounce Friday. Peak-to-trough, silver declined a whopping 7.7% this week. The December contract is currently valued at $16.93, according to Bloomberg data.
Interest Rates are Rising
U.S. Treasury yields spiked this week by the most in three years on the belief that the Federal Reserve is done cutting interest rates.