Precise Investors

Alternative Investments

Gold prices rise as dollar eases


Spot gold rose 0.2 per cent at $2,023.40 per ounce and U.S. gold futures for February delivery increased 0.2 per cent to $2,041.20

Gold prices rose on Wednesday as the dollar dropped and weaker-than-expected U.S. jobs data cemented expectations that the Fed’s policy tightening cycle has come to an end.

Spot gold rose 0.2 per cent at $2,023.40 per ounce by 0538 GMT. U.S. gold futures for February delivery also increased 0.2 per cent to $2,041.20.

Volatility in gold prices is likely to remain capped heading into Friday’s U.S. non-farm payrolls data, said City Index Senior Analyst Matt Simpson.

It might take a particularly weak set of numbers for gold to post strong gains from here — as many bullish fingers were likely burned with gold’s false break to a record peak, Simpson added.

Bullion jumped to a record high of $2,135.40 on Monday on elevated bets for a Fed rate cut, before declining more than $100 in the same session, on uncertainty over the timing of the monetary policy easing.

Data on Tuesday showed U.S. job openings dropped to a more than two-and-a-half year low in October, indicating that higher rates were dampening demand for workers.

The dollar index dropped 0.2 per cent against a basket of currencies after rising to a two-week high on Tuesday, making gold less expensive for other currency holders.

Attention now shifts to the Friday release of the November non-farm payrolls data that could provide more clues on U.S. interest rate outlook ahead of Fed’s policy meeting next week.

Traders are pricing in about a 60 per cent possibility of a rate cut by March next year, according to CME’s FedWatch Tool.

Silver gained 0.6 per cent to $24.27 per ounce, while platinum added 0.3 per cent to $901.30. Palladium gained 0.9 per cent to $943.01 per ounce, after reaching a more than five-year low on Tuesday.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Precise Investors. The information provided on Precise Investors is intended for informational purposes only. Precise Investors is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Leave a Reply