close
Precious Metals

Weak dollar: Gold comes out of multi-month lows

gold

Gold rose over 1 per cent on Monday, coming out of lows for 9-1/2 month lows, as the U.S. dollar extended losses after touching a near 14-year high last week.

Spot gold had gained 0.92 per cent to $1,193.80 (£955.87) an ounce by 0532 GMT after climbing as high as $1,197.54 (£958.86) earlier in the session.

The metal recorded its lowest since Feb. 8 at $1,171.21 (£937.20) per ounce in the previous session.

U.S. gold futures were up 1.3 per cent at $1,193.50 (£955.63) per ounce.

The dollar index, which measures the greenback against a basket of currencies, was down 0.67 per cent at 100.810 after slipping 0.2 per cent in the previous session as U.S. Treasury yields eased from recent peaks.

“The dollar strength has eased somewhat and we may be seeing some buying interest re-enter the market,” ANZ analyst Daniel Hynes said.

“There has been some heavy selling over the past couple of weeks, so there may be a touch of technical-based buying.”

The metal has fallen about 7 per cent so far this month on the back of a stronger U.S. dollar and surging bond yields as investors bet that U.S. President-elect Donald Trump’s policies would spur growth and inflation.

A stronger greenback makes dollar-denominated gold expensive for holders of other currencies, while higher interest rates could dent the appeal of non-yielding bullion.

Gold was riding on dollar weakness and the support for the yellow metal sits around $1,180 (£948.47) an ounce, while resistance comes in at $1,200 (£963.76), MKS PAMP Group trader Sam Laughlin said.

Paul

The author Paul