Gold Futures Plummet To Two Week Low
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Gold prices plunged to a two-week low after the dollar rose surged against the euro. Other precious metals also fell sharply Friday. However, crude oil surged to a new record of $117 and wheat prices plummet.
The dollar edged higher after European officials expressed concern that its euro strength was becoming harmful. A stronger dollar encourages investors to sell hard assets like gold and silver, which are viewed as inflation hedges since they’re known for holding their value in times of rising prices.
Gold for June delivery dropped $27.70 to settle at $915.20 an ounce on the New York Mercantile Exchange, after earlier falling as low as $907.30, its lowest level in two weeks. Gold was “heavily weighed down by an initial retreat in crude oil and the dollar’s rapid ascent,” Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said in a note.
In energy futures, crude oil shot up to record level after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture. The group promised further attacks on the country’s petroleum industry, rattling investors who have pushed oil prices to record highs for five straight days.
In agriculture futures, wheat plunged to its lowest level in four months as investors bet that favorable weather in the U.S. Midwest would boost crops.
