Gold rises on multi-month lows as dollar pulls back from near 14-year highs

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The metal marked its lowest since Feb. 8 at $1,171.21 per ounce in the previous session.

U.S. gold futures were up 1.03 percent at $1,190.40 per ounce.

Spot prices marked their lowest since Feb. 8 at $1,171.21 on Friday, under pressure from a 14-year high in the dollar. The metal has fallen 7 percent so far this month, as the dollar and bond yields benefited from heightened expectations of enlarged fiscal spending by U.S. President-elect Donald Trump.

As gold pays no interest, the rise in returns from U.S. 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 percent on Monday while the yield on 10-year U.S. Treasuries retreated from a 16-month high of 2.417 percent touched last week.

In other markets, crude prices were marginally lower on doubts OPEC can nail down an agreement to limit supplies 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 U.S. 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.»

Federal Reserve policymakers appeared confident on the eve of the presidential election that the economy was strengthening enough to warrant an interest rate hike, minutes from the Fed’s early November meeting showed.

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