Gold Prices Approach Two-Week High as Dollar Gains Cool

Gold prices posted rare gains on Tuesday, as precious metals received a boost from a sliding US dollar.

December gold futures rose $6.70, or 0.5%, to $1,263.30 a troy ounce, marking its second consecutive advance on the Comex division of the New York Mercantile Exchange. Tuesday’s settlement was also the highest since October 5.

gold

Meanwhile, silver prices also rallied Tuesday. December silver contracts advanced 16 cents, or 0.9%, to $17.63 a troy ounce.

Precious metals have been ravaged by growing expectations the US Federal Reserve will raise interest rates in the coming months. Three central bankers voted in favour of raising interest rates at the September 20-21 Federal Open Market Committee (FOMC) meeting. Since then, gold prices have been on a sharp downward trajectory.

Growing rate-hike bets have fueled large gains in the US dollar, which only last week reached its highest level in seven months. The dollar has moderated against a basket of currencies this week, giving precious metals more room to recover.

Fed Fund futures, which are used to bet on monetary policy, imply a nearly 70% chance that the US central bank will raise rates at its meeting in December. According to analysts, a December rate rise is already somewhat factored into the price of gold already. This suggests the yellow metal may have already found its bottom near last week’s four-month lows.

Rate-watchers were closely monitoring the economic data on Tuesday. The Labor Department reported that US consumer prices rose 0.3% in September and were up 1.5% compared to a year ago, edging closer to the Fed’s target of 2%.

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About the author

Sam Bourgi

Sam Bourgi is a financial market analyst for economiccalendar.com. He has more than six years of progressive experience in economic and financial analysis, research consulting and sectoral analysis. As a published author in government, peer-reviewed, online and industry sources, he has developed a fundamental approach to the financial markets with a broad focus on stock indices, commodities and the technology sector. He earned his Bachelor’s Degree from the University of Windsor and Master’s degree from McMaster University.

Indices

NamePrice($)CommentChange($)Change %
S&P 5002,260+13.34+0.59%
NASDAQ5,445+27.14+0.50%
NYSE11,192+41.83+0.38%
FTSE 1006,954.21+22.66+0.33%
DAX11,203.63+24.21+0.22%
CAC 404,764.07+28.59+0.60%
EURONEXT 100913.06+5.79+0.64%
Nikkei 22518,996.37+230.90+1.23%
HANG SENG INDEX22,760.98-100.86-0.44%

Commodities

NamePrice($)Change($)Change %Comment
Light Sweet Crude Oil Futures,D47.48-0.01-0.02%
Gold Futures,Dec-20161,158.40-11.40-0.97%
Silver Futures,Dec-201616.82-0.20-1.20%
Copper Futures,Dec-20162.65+0.03+0.95%