Gold and silver prices have rebounded in trading today as the euro strengthened against the U.S. dollar. Despite today’s gains, gold is still headed for a fourth straight weekly loss.
At last check, spot gold was trading 0.74% higher at $1,657.09 an ounce.
Nic Brown, Head of Commodity Research at Natixis, told Reuters that the strength of the U.S. economy is a negative for gold from the perspective of the U.S. dollar as well as from the perspective of the portfolio flows for U.S. investors.
Brown said that he has been negative on gold for a little while, and thinks that it has passed its peak. He added that over the medium to long-term horizon he expects to see prices quite a bit lower.
Brown believes that quantitative easing and abnormally low U.S. interest rates have been a huge support for gold prices and it is no surprise that the falling gold price recently has been accompanied by quite a significant rise in U.S. interest rates.
Earlier this week, ETP holdings touched a record of nearly 70.9 million ounces; however, the last couple of days of outflows have erased all of the build-up that had taken place this month.
According to UBS, Thursday’s decline in ETP holdings was the largest outflow since beginning of the year which pushed this month’s net position into negative territory.
Silver prices are also rebounding in early trading today. At last check, spot silver was trading 0.86% higher at $31.82 an ounce.
