Gold crawls up as dollar retreats

Source : REUTERS
By : Apeksha Nair
Last Updated: Wed, Oct 04, 2017 10:51 hrs

Gold prices rose on Wednesday after hitting a 7-week low in the previous session, buoyed as the dollar pulled back from a 1-1/2-month high against a basket of currencies.

Spot gold had risen 0.3 percent to $1,275.34 an ounce by 0338 GMT. It touched its lowest since mid-August at $1,267.76 on Tuesday.

U.S. gold futures for December delivery were also up 0.3 percent at $1,278 per ounce.

“Gold prices have steadied in the past 24 hours, with a stalling U.S. dollar contributing to the move. Long liquidation over the last 2 weeks has put gold on a more steady footing, with the market now turning to this week’s non-farm payrolls report,” said Jordan Eliseo, chief economist at ABC Bullion.

The dollar on Wednesday shed gains against a basket of major currencies over speculation that U.S. President Donald Trump’s choice for the next Federal Reserve Chair may be a less hawkish candidate than previously thought.

Meanwhile, world stocks continued to notch up gains, with Japan’s Nikkei climbing to its highest since August 2015 on strong U.S. auto sales in September.

Three major U.S. stock indexes on Tuesday closed at record highs on signs of strong global economic growth.

A weaker dollar makes bullion cheaper for holders of other currencies, while stronger equities imply increased appetite for risk among investors.

“Volatility should pick up in North America as we head into a data-heavy end of the week,” said Jeffrey Halley, senior market analyst at OANDA.

Spot gold may break resistance at $1,279 and rise into a zone of $1,287-$1,297 per ounce, said Reuters technicals analyst Wang Tao.

The Perth Mint’s sales of gold products doubled in September from a month earlier, while silver sales surged 78 percent, the mint said in a blog post on its website on Tuesday.

Among other precious metals, silver climbed 0.8 percent to $16.72 an ounce.

Platinum was 0.5-percent higher at $912 an ounce, while palladium climbed 0.7 percent to $921 an ounce. The sister-metals, widely used as autocatalysts, hit price parity for the first time in 16 years last week.

“Fundamentally, the market balances and ready availability of metal support palladium trading at a premium to platinum,” analysts at Standard Chartered wrote in a note dated Tuesday.

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