Gold Rises from its One Week Low, Investors Assess Economy

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Gold Rises from its One Week Low, Investors Assess Economy

Gold rose from the lowest in a week while the dollar dropped, boosting the demand for the metal.

The dollar dropped the first time in four days against the basket of currencies as the Ebola diagnosis in New York affected risk appetite.

In the last quarter, gold dropped 8.4% as the dollar posted the largest gain since 2008. Global holdings in exchange traded funds supported by the metal dropped to a low of five years on October 22 as reported by Bloomberg.

The bullion rebounded from the low of the year reached on October 6 after citations by the Federal Reserve that slowing overseas economies were a risk to US growth. The concerns prompted traders to push back estimates for the increase of interest rates by the Fed.

RJO Futures senior market strategist, Tom Power said, “Today’s upward move is all about dollar reacting to Ebola fears in New York. The long-term price direction will be all about what the Fed does next.”

December delivery gold futures gained 0.2% settling at $1,231.80 per ounce on the Comex in New York. Prices had reached $1,226.30 yesterday, the lowest from October 15 and they are down 0.6% this week.

According to Reuters, the metal was weighed down by the strong global economic data reported on Thursday, which calmed the nerves of investors.

ANZ analyst Victor Thianpiriya said, “Gold prices weakened as positive economic data hurt investor demand. The combination of a stronger dollar and higher bond yields has seen gold exchange-traded fund holdings slump. Strong physical demand is only providing a backstop for prices.”

December delivery silver futures rose 0.1% to $17.182 per ounce on Comex.
On the New York Mercantile Exchange, January delivery platinum futures dropped 0.3% to $1,250.90 per ounce. December delivery palladium futures gained 0.2% to $780.90 per ounce, up by 3.2% for the week.

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