Markets > Futures

Gold futures rise on U.S. political uncertainty

Xinhua Financein CHICAGO
2017-02-07 04:23

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Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday as political uncertainty in the U.S. gave support to the precious metal.

The most active gold contract for April delivery rose 11.3 U.S. dollars, or 0.93 percent, to settle at 1,232.10 dollars per ounce.

A Seattle judge ordered a temporary halt to U.S. President Donald Trump's travel ban on Friday, lending support to the precious metal as investors became unsure of the political climate in the United States. This led gold to reach its highest level since November, as traders are weighing the possibility that the U.S. president may have further actions blocked by the judiciary branch or opposition party in the legislative branch.

The precious metal was given support as the U.S. Dow Jones Industrial Average fell by 38.59 points, or 0.19 percent as of 1715 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.

Gold was prevented from rising further as the U.S. Dollar Index rose by 0.34 percent to 100.06 as of 1720 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.

Vice Chairman of the Federal Reserve Stanley Fischer will speak on Saturday.

The Fed's members normally uses speeches after its Federal Open Market Committee (FOMC) meetings to clarify their positions.

Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest.

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 4 percent at the March meeting and 25 percent for the May meeting.

Silver for March delivery rose 21.4 cents, or 1.22 percent, to close at 17.693 dollars per ounce. Platinum for April delivery added 7.4 dollars, or 0.74 percent, to close at 1,014.10 dollars per ounce.

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