By Steven Cochran
The spot gold price opened just slightly lower around $1,335/oz on Monday morning due to the dollar hitting an overnight high. Supply concerns for crude oil also dragged commodities lower in general. This marked a two-week low for the yellow metal.
Mostly hawkish cross-talk from Federal Reserve officials and modestly higher chances for a Fed rate hike have boosted the U.S. dollar and cooled off demand for Treasurys. Meanwhile, silver prices were sharply lower, losing nearly 40¢ per ounce (-2%) to trade slightly below $19/oz. This was a seven-week low. Platinum and palladium followed gold about 0.4% into the red.
Friday Fed Talk
Friday’s market action can all be traced back to suddenly hawkish statements by Fed officials after last week’s release of the July FOMC meeting minutes. New York Federal Reserve president William Dudley (who always votes in the FOMC) talked about a “possible” rate hike in September, while complaining that the markets were “too complacent” about the chances of higher interest rates. Moreover, San Francisco Fed president John Williams (who isn’t voting this year) chimed in, saying the possibility of the Fed hiking in four weeks was still “in play.”