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Gold Prices Broadly Higher as U.S. Dollar Slumps
© Reuters. Gold prices were higher on Monday.
Investing.com - Gold prices were higher on Monday as the greenback slumped amid trade war tensions and investors waited for the Federal Reserve’s interest rate decision this week.
Comex gold futures for December delivery increased 0.36% to $1,205.60 a troy ounce as of 9:29 AM ET (13:29 GMT).
The Fed meets on Tuesday and Wednesday, with traders expecting a rate hike for the third time this year. The market has already priced in a 100% chance of a 25-basis-point increase.
Chances of an increase in December were at 86.1%.
Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.
Meanwhile, trade tensions held down the greenback, as U.S. duties on $200 billion of Chinese goods went into effect and China accused the U.S. of bullying.
China cancelled mid-level trade talks with the U.S. as well as a proposed visit to Washington by Vice Premier Liu He, which had been scheduled for this week, The Wall Street Journal reported.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slumped 0.34% to 93.47.
Gold usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.
Other metals were mixed on the Comex, with silver futures falling 0.34% to $14.310 a troy ounce. Among other precious metals, platinum futures rose 0.30% to $835.40, while palladium futures increased 0.39% to $1,049.00 an ounce. Copper futures gained 0.16% to $2.862 a pound.
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