Gold rose on Monday while the US dollar retreated, giving way to other currencies and increasing the foreign buyers’ allure to dollar-priced commodities.
December delivery gold, the most traded contact, rose 0.4% or $4.60 at $1,197.50 per troy ounce on the Comex at the New York Mercantile Exchange. In early trading, prices dropped to $1,183.30 per ounce, the lowest from December 31.
The Wall Street Journal quoted Linn Group’s director of Ira Epstein division, Ira Epstein as having said, “You’re seeing the dollar down today, so you’re getting a bounce in gold.”
As the dollar retreats, gold and other precious metals have become more affordable to foreign buyers using other currencies in their purchases. The dollar index dropped from 86.70 to 86.40.
As reported by Fox Business, the absence of China, the main consumer of gold, is weighing on the market, which sees a rise in demand from retail investors and jewelers when prices drop. Chinese markets are closed for national holidays and are expected to reopen Wednesday.
In Asia, gold premiums were quoted at $1.20 and $1.60 per ounce to spot London prices, which were unchanged since last week.
For most of 2014, precious metals have been tracking the dollar closely as expectations for tighter monetary policies from the Federal Reserve improved the dollar’s appeal.
Lee Cheong Gold Dealers, Hong Kong, chief dealer, Ronald Leung said, “A strong dollar is a major problem for gold, Sentiment is very bearish but I think we expect some king of rebound.”
Silver prices rose with the December delivery contract trading 1.1% or 18.4 cents at $17.010 per troy ounce on Comex.
TD Securities traders said in a note to its clients, “Silver is renowned for overextension during cycle trends and rarely disappoints in this regard.”
Platinum rose 0.2% at $1,217.70 per ounce, after having slumped to $1,183.25 earlier.