Comex gold futures fell to $1,263.74 a troy ounce in early-morning trade on Tuesday after rallying earlier in European trade to hit $1,270.32, its highest point since May 1. Spot gold prices are down 0.27% to $1,263.55 per troy ounce.
European political fears are responsible for the gold future rally, with Greek bailout package concerns leading to uncertainty.
Investors fear that Greece won’t reach an agreement on their bailout agreement, leading to a recurring eurozone debt crisis. The dollar firmed against the pound and euro, holding gold prices back from rising further.
Silver rose to $17.47 overnight and is holding steady at $17.382, up 0.34%, in early-morning trade on Tuesday. The precious metal’s price is the highest its been since April 27.
Concerns over Brexit also added to political fears.
Oil prices are dipping on Tuesday, with growing concerns that OPEC’s deal on an output cut extension may not be enough to stabilize oil prices. Benchmark Brent dipped $0.95 a barrel, falling to $51.69 amidst rising production cut fears.
OPEC, Russia and other oil producers agreed to extend their 1.8 million barrel per day production cuts for an additional nine months last week. The cuts will remain in place until the end of the first quarter in 2018.
Oil prices fell after the deal’s extension was announced. OPEC concerns dominated oil trading in a volatile day.
Shale production in the United States is part of the problem, resulting in OPEC’s efforts being offset. Drillers in the United States added rigs again last week, marking nearly five straight months of rig count gains and 722 active rigs listed.
The rig count is the highest it has been since April 2015.
Forecasts for oil prices have been reduced as production costs in the U.S. continue to fall. Goldman Sachs (GS) predicts that the falling production prices will keep oil supplies rising through 2020.
Prices may be supported by the busy summer season when travelers consume more oil.