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Gold starts the week on upbeat note

CommoditiesJul 17, 2017 08:12AM ET
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© Reuters. Gold prices start the week on firm footing - Gold prices were higher in North American trade on Monday, hitting the strongest level in around two weeks on bets that lackluster U.S. data will keep the Federal Reserve cautious about the future pace of policy tightening.

Comex gold futures were at $1,233.82 a troy ounce by 8:10AM ET (1210GMT), up $6.30, or around 0.5%. It touched its highest since July 3 at $1,234.76 earlier.

Prices logged a gain of about 1.5% last week, as dovish comments from Fed Chair Janet Yellen combined with soft inflation data saw investors temper their expectations for tighter monetary policy in the U.S. in the months ahead.

Futures traders are pricing in less than a 40% chance of a rate hike by the end of the year, according to’s Fed Rate Monitor Tool, down from around 50% a week earlier.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell to a 10-month low of 94.86 in overnight trade. It was last at 95.00 in early U.S. trade.

Meanwhile, yields of the benchmark 10-year U.S. Treasury dipped to around 2.31%, remaining well-off highs near 2.39% touched earlier this month.

Economic reports will remain important in the week ahead as market players seek to gauge the strength of the world's largest economy and how it will impact the Fed's view on monetary policy.

This week's calendar features data on the U.S. housing sector, as well as surveys on manufacturing conditions in the Philadelphia and New York regions and weekly jobless claims.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path.

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

Also on the Comex, silver futures climbed 17.1 cents, or roughly 1.1%, to $16.10 a troy ounce, the most since July 7.

Among other precious metals, platinum was up 0.7% at $930.10, while palladium added 0.3% to $858.15 an ounce.

Meanwhile, copper futures advanced 3.1 cents to a four-month peak of $2.722 a pound, after data showed China's second quarter gross domestic product handily topped forecasts.

The economy grew 6.9% in the three months to June 30, the same rate as the first quarter, the National Bureau of Statistics said earlier. Analysts had expected the economy to expand 6.8% in the April-June quarter.

Gold starts the week on upbeat note

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