Gold prices rose more than 1% on
Monday, recovering from their lowest levels since February as the dollar
and long-dated US treasury bond yields retreated from recent highs.
Spot gold was up
0.7% at $1,191.26/oz by 11.19am GMT, after climbing as high as $1,197.54 earlier in the session. US gold futures were up 1% at $1,190.30/oz.
Spot prices marked their lowest since February 8 at $1,171.21 on Friday, under pressure from a 14-year high in the dollar. The metal has fallen 7% so far in November, as the dollar and bond yields benefited from the heightened expectation of enlarged fiscal spending by US president-elect Donald Trump.
As gold pays no interest, the rise in returns from US bonds and other markets is seen as negative for the metal.
The dollar index, which measures the greenback against a basket of currencies, was down 0.4% on Monday while the yield on 10-year US treasuries retreated from a 16-month high of 2.417% touched last week.
In other markets, crude prices were marginally lower on doubts oil cartel Opec can nail down an agreement to limit supply and Europe’s main stock markets also fell.
"If oil prices collapse or stay low, then inflation won’t pick up as much and there would be less of an incentive to raise US rates rapidly and the dollar would not be as strong, which would be supportive for gold," ING head of commodity strategy Hamza Khan said.
"However, going forward, the equity market is going to be a bigger driver than the rush to safety for gold."
US Federal Reserve policy makers appeared confident on the eve of the presidential election that the economy was strengthening enough to warrant an interest rate rise, minutes from the Fed’s early November meeting showed. Gold was riding on dollar weakness and the support for the metal sits around $1,180/oz, while resistance comes in at $1,200, MKS Pamp Group trader Sam Laughlin said.
Traders also said a directive from the People’s Bank of China (PBoC) to limit gold imports, was creating concern about supply in the top consumer of the metal and kept premiums in Shanghai around $22. Gold premiums in China jumped to the highest in nearly three years last week on supply worries.
Demand from South East Asia was also quite good and buying at lower prices could have driven prices higher, said Cameron Alexander, an analyst with Thomson Reuters GFMS metals consultancy.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.73% to 885.04 tonnes on Friday.
Among other precious metals, silver rose 1% to $16.68/oz, palladium climbed 1.2% to $749.80 and Platinum was up 1.5% at $918.
Reuters
Spot gold was up
0.7% at $1,191.26/oz by 11.19am GMT, after climbing as high as $1,197.54 earlier in the session. US gold futures were up 1% at $1,190.30/oz.
Spot prices marked their lowest since February 8 at $1,171.21 on Friday, under pressure from a 14-year high in the dollar. The metal has fallen 7% so far in November, as the dollar and bond yields benefited from the heightened expectation of enlarged fiscal spending by US president-elect Donald Trump.
As gold pays no interest, the rise in returns from US bonds and other markets is seen as negative for the metal.
The dollar index, which measures the greenback against a basket of currencies, was down 0.4% on Monday while the yield on 10-year US treasuries retreated from a 16-month high of 2.417% touched last week.
In other markets, crude prices were marginally lower on doubts oil cartel Opec can nail down an agreement to limit supply and Europe’s main stock markets also fell.
"If oil prices collapse or stay low, then inflation won’t pick up as much and there would be less of an incentive to raise US rates rapidly and the dollar would not be as strong, which would be supportive for gold," ING head of commodity strategy Hamza Khan said.
"However, going forward, the equity market is going to be a bigger driver than the rush to safety for gold."
US Federal Reserve policy makers appeared confident on the eve of the presidential election that the economy was strengthening enough to warrant an interest rate rise, minutes from the Fed’s early November meeting showed. Gold was riding on dollar weakness and the support for the metal sits around $1,180/oz, while resistance comes in at $1,200, MKS Pamp Group trader Sam Laughlin said.
Traders also said a directive from the People’s Bank of China (PBoC) to limit gold imports, was creating concern about supply in the top consumer of the metal and kept premiums in Shanghai around $22. Gold premiums in China jumped to the highest in nearly three years last week on supply worries.
Demand from South East Asia was also quite good and buying at lower prices could have driven prices higher, said Cameron Alexander, an analyst with Thomson Reuters GFMS metals consultancy.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.73% to 885.04 tonnes on Friday.
Among other precious metals, silver rose 1% to $16.68/oz, palladium climbed 1.2% to $749.80 and Platinum was up 1.5% at $918.
Reuters
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