Markets > Futures

Gold down on stronger U.S. dollar

CHICAGO
2016-11-22 06:04

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Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday on a technical rebound and a weaker U.S. dollar.

The most active gold contract for December delivery rose 1.1 U.S. dollars, or 0.09 percent, to settle at 1,209.8 dollars per ounce.

The precious metal was given support after two weeks of falling prices, causing a technical bounce, aided by a weaker U.S. dollar.

The U.S. Dollar Index fell by 0.39 to 101.02 as of 1900 GMT. The index is a measure of the dollar against a basket of major currencies.

Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The precious metal was also put under further pressure as the U.S. Dow Jones Industrial Average rose by 88.76 points, or 0.47 percent as of 2000 GMT.

Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Investors are looking to the week ahead for several economic reports which will give hints as to the central bank's thinking on the raising of interest rates.

Analysts believe the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.

According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 95 percent at the December meeting and 96 percent for the February meeting.

Silver for December delivery dropped 10.3 cents, or 0.62 percent, to close at 16.521 dollars per ounce. Platinum for January delivery added 14.5 dollars, or 1.57 percent, to close at 936.50 dollars per ounce.

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