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Gold rises for second day on a weaker dollar
Published Nov 22, 2016 03:58AM ET
© Reuters. Gold prices rise for second day on a weaker dollar
Investing.com - Gold prices rose for a second day on Tuesday as the weaker dollar helped lift the precious metal off recent lows.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last at $1,217.50 a troy ounce, after earlier rising as high as $1,220.85.
On Monday, gold rose 0.82% after falling to lows of $1,201.30 on Friday, a level not seen since May 30.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 101.02, holding below the 13-and-a-half year high of 101.54 set on Friday.
Before falling on Monday the greenback had risen for 10 straight sessions, its longest winning streak since May 2012.
Gold is priced in dollars and becomes more affordable to holders of other currencies when the dollar declines.
But market analysts have warned that the outlook for gold remains cloudy in the near-term, given a U.S. interest rate hike in December is now a near-certainty.
According to Investing.com's Fed Rate Monitor Tool, odds for a rate hike at the Fed's December 13-14 meeting are at 100%.
Prices of the yellow metal are down more than 4% so far this month amid optimism that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Elsewhere in metals trading, silver futures for December delivery were at $16.86 a troy ounce, while copper futures traded at $2.560 a pound.
Copper prices have risen around 16% so far this month on expectations of rising demand from China and an increase in infrastructure spending in the U.S. when Donald Trump becomes president.
China and the U.S. are the top two consumers of the industrial metal.
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