Gold hits a more than six-month high

by Jonathan Adams
Gold futures

Spot gold added 1.4 per cent at $2,041.55 per ounce, highest since May 10

Gold gained for a fourth successive session on Tuesday and reached a more than six-month high, led by a declining dollar and hopes that the U.S. Federal Reserve has finished hiking interest rates.

Spot gold added 1.4 per cent at $2,041.55 per ounce by 2000 GMT, highest since May 10.

U.S. gold futures for December delivery settled 1.4 per cent up at $2,040.

The near-term outlook for gold remains bullish, with the dollar index in a downturn on expectations the Fed will no longer hike interest rates and will maybe even cut them by springtime, said Jim Wyckoff, senior analyst at Kitco Metals.

However, if (U.S.) GDP figures and inflation indicators are stronger than expected, it will dent traders’ enthusiasm in bullion, Wyckoff said.

Fed policymakers appear increasingly comfortable closing out the year with interest rates on hold and waiting before cutting them. Lower rates reduce the opportunity cost of holding non-interest-bearing bullion.

Fed Governor Christopher Waller said he is “increasingly confident” that policy is in the right spot.

Making bullion less expensive for overseas buyers, the dollar index hit its lowest since mid-August.

Investors will monitor Thursday’s U.S. PCE data, the Fed’s preferred inflation indicator. The focus is also on the revised U.S. Q3 GDP data scheduled for Wednesday.

A sense of caution ahead of another busy week for global financial markets is also lending support to the precious metal. Given how the $2,000 level proved an extremely tough resistance to conquer, gold could end up dropping without a potent fundamental catalyst, FXTM senior research analyst Lukman Otunuga said.

Silver added 1.4 per cent to $24.97 per ounce, platinum rose 2.3 per cent to $939.80. Palladium dropped 1.4 per cent to $1,055.59 per ounce.

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