Investing.com – Gold prices rose on Monday supported by a dip in the dollar as an uptick in geopolitical uncertainty increased demand for safe-haven gold but growing expectations that the Federal Reserve will hikes rates for the third time this year capped gains.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $10.07, or 0.79%, to $1,285.01. a troy ounce.
Gold made a strong start to the week amid renewed geopolitical uncertainty as President Donald Trump’s tweets over the weekend, sparked fears that the president is leaning toward military action against North Korea.
President Trump said the United States has been “unsuccessfully dealing” with North Korea for 25 years, insisting that “only one thing will work” to curb the isolated nation’s efforts to further develop nuclear weapons.
Analysts have been quick to downplay the strong gains in gold prices, insisting that the outlook for the precious metal remains bearish amid expectations that a higher interest rate environment will curb demand for non-yielding bullion.
“We are in a downward-sloping channel and traders should be looking at selling rallies with prices below $1,300,” Phillip Streible, senior market analyst at RJO Futures, said.
Recent data showing traders continued to abandon their bullish bets on the precious metal last week supports Streible’s bearish outlook on the precious metal.
Net bullish bets on gold fell to 203.9, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Gold is sensitive to moves higher in both bond yields – A rising interest rate environment lifts the opportunity cost of holding non-yielding assets such as bullion.
In other metals trading, silver futures rose 0.96% to $16.95 while platinum futures added 0.27% to $919.15.
Copper traded at $3.03, up 0.03%, while natural gas, fell by 1.08% to $2.83.