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Gold rebounds as U.S. dollar weakens

CHICAGO
2017-06-22 03:31

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Gold futures on the COMEX division of the New York Mercantile Exchange reversed its downturn in the past two sessions as U.S. dollar weakened and stocks declined.

The most active gold contract for August delivery rose 2.3 U.S. dollars, or 0.18 percent, to settle at 1,245.80 dollars per ounce.

The U.S. Dollar Index slipped 0.08 percent to 97.67 as of 1724 GMT. The index is a measure of the dollar against a basket of other major currencies. When the dollar goes down, gold futures will rise.

The U.S. dollar had kept an upward trend due to the benchmark interest rate hike by Federal Reserve last week and expectations for further rate increases later this year.

New York Fed President William Dudley said on Monday that inflation might pick up as wages rise along with continuing improvement in the labor market.

Philadelphia Fed President Patrick Harker, in an interview with the Financial Times on Wednesday, defended the rate hike decision they made last week but added that he advocated a "pause" on further rate increases, while the central bank starts to pare its balance sheet.

The rally of gold futures on Wednesday was also supported by the retreat of stocks.

The Dow Jones Industrial Average went down 55.96 points, or 0.26 percent, to 21,411.18 as of 1744 GMT.

Analysts note that when equities post losses, the gold futures usually goes up. As for other precious metals, silver for July delivery fell 4.3 cents, or 0.26 percent, to close at 16.374 dollars per ounce. Platinum for July delivery rose 5.5 dollars, or 0.60 percent, to settle at 927 dollars per ounce. Editem

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