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Gold prices gain as dollar slides to 6-month lows

CommoditiesMay 16, 2017 08:44AM ET
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© Reuters. Gold rises as dollar slides to 6-month lows

Investing.com - Gold prices were higher in North American trade on Tuesday, trying for its fifth-straight winning session as the U.S. dollar slid to the lowest level since November amid signs of slowing economic activity in the U.S. and following another controversy from President Donald Trump.

Comex gold futures rose around $5.00, or about 0.4%, to $1,235.30 a troy ounce by 8:40AM ET (12:40GMT). Meanwhile, spot gold was at $1,235.40.

The yellow metal notched a fourth-straight winning session on Monday after rising to its highest since May 4 at $1,237.40, following the release of underwhelming U.S. manufacturing data.

Data on Tuesday showed that the number of housing starts and building permits issued in the U.S. unexpectedly declined in April.

The U.S. Commerce Department said that housing starts decreased by 2.6% from the month before to hit 1.172 million units last month. Analysts had expected April’s reading to rise 3.7% from the prior month’s initial reading of 1.203 million units.

Meanwhile, the number of building permits issued fell 2.5% to 1.229 million units last month from 1.260 million the month before.

The disappointing data is the latest in a string of weaker than expected U.S. economic reports which saw investors temper expectations for more rate hikes by the Federal Reserve.

Markets are pricing in around a 70% chance of a hike at the Fed's June meeting, according to Investing.com’s Fed Rate Monitor Tool, down from more than 80% in previous week.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, weakened for a fifth straight day, falling around 0.6% to 98.23 in New York morning trade.

It slid to an overnight low of 98.17, a level not seen since November 10, amid reports that President Donald Trump disclosed highly classified information to Russia's foreign minister about a planned Islamic State operation in a meeting last week.

The news added to concerns that Trump will be unable to successfully push through his economic stimulus program in the face of mounting controversies.

Also on the Comex, silver futures gained 15.9 cents, or about 1%, to $16.76 a troy ounce.

Elsewhere in metals trading, platinum tacked on 1.2% to $939.70, while palladium added 0.8% to $803.58 an ounce.

Industrial metals rallied on Monday after Chinese President Xi Jinping pledged $124 billion in fresh financing to support its “Belt and Road” infrastructure mega-program.

Gold prices gain as dollar slides to 6-month lows
 

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erick deshawn clewis
erick deshawn clewis May 16, 2017 11:50AM ET
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investing is not against America ?
 
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