Gold Futures Climb as the Dollar Declines

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Gold Futures Climb as the Dollar Declines

On Monday, gold rose as the dollar dropped on uncertainty on when the Federal Reserve would raise the interest rates while investor appetite for risk declined due to global economy worries.

Spot gold climbed to near a high of four weeks at $1,273.30 per ounce and traded up 0.4% at $1.227.75. According to Reuters, the metal posted the largest weekly gain in four months last week, climbing 2.7%. earlier, US gold futures reached the highest from September 17 at $1,238 per ounce.

The metal has had a 4% rebound from a low of fifteen months at $1.183.46 last week after strong jobs data in the US fuelled talk that interest rates might rise sooner than expected.

Gold’s rise was assisted by the lower dollar after the Fed officials warned over the weekend that it would delay increase in interest rates if there was a slump in global recovery.

Ole Hansen, Saxo Bank senior manager said, “The expectations for a rate hike have been pushed back by at least a quarter so now we are not looking at the first half but the second half of 2015 and that is potentially going to limit the aggressiveness of the dollar’s upward move.”

Bloomberg quoted RBC Capital Markets LLC precious metals strategist, George Gero as having said, “It’s all about the dollar and interest rates, because gold is dollar-denominated, no matter how you look at it.”

INTL FCStone said in a note, “Gold is going to be doubly influenced by both the equity markets and the dollar over the course of the week. We suspect that both will continue to drop over the short term, offering a measure of support to prices.”

December delivery silver futures rose 0.4% to $17.365 per ounce. On the New York Mercantile Exchange, January delivery platinum futures rose 0.1% to $1,263.30 per ounce. December delivery palladium futures dropped 0.2% to $783.15.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com