Gold futures yesterday looked likely to extend a rally that has returned prices to July levels, with a generally upbeat tone in place even with volatile stock markets quieted.
Fresh weakness for a leading dollar index helped gold hold higher ground as December gold GCZ8, +0,32 percent rose $2,90, or 0,2 percent, to $1,233 an ounce. A close at this level would mark the highest since July 26, according to FactSet data.
Meanwhile, December SIZ8, +0,53 percent silver rose 6 cents, or 0,5 percent, to $14,795 an ounce.
Stocks indicated a stronger start a day after a tech-driven retreat. Stocks have been highly volatile amid mounting concerns over rising Treasury rates TMUBMUSD10Y, +0,27 percent stirring interest in haven gold. A rapid rise in rates also has coincided with weakness in the US dollar, which has helped to remove a headwind for the precious commodity. Gold tends to gain when the dollar is weaker because the assets become relatively more attractive to buyers using other monetary units. One popular measure of the buck, the ICE US dollar Index DXY, -0,0 percent was down 0,1 percent at 94,96 early Tuesday. The dollar is just in the red for the month of October so far.
Recent dollar weakness has defied the stronger dollar trend in the year so far, a rise fuelled by monetary policy tightening at the Federal Reserve and leaving the popular gauge of the US currency up 3, percent so far in 2018, according to FactSet. The Fed has hiked interest rates three times this year and may do so a fourth time before year-end, which could provide some resistance to gold bulls because rising rates are likely to juice the dollar and make risk-free government bonds a more attractive investment when compared against bullion.
Source : The Herald