Monday, July 17, 2017

Gold continues move back up to $1250 as dollar falls to 10 month lows

On July 17 gold is opening higher in the markets, and is looking to close positive for the 4th time in the past 5 trading sessions.

Rising back above $1230 in early morning trading, the short-term outlook for the precious metal appears to be a return back to the $1250 level as the dollar continues to fall towards 94 on the index, and its lowest level in the past 10 months.

Gold climbed on Monday and was likely to see further gains after the dollar slumped to multi-month lows on the back of data that pointed to weak U.S. inflation and less prospect of rate hikes. 
"The dollar continues to be on the back foot and yields have dropped back somewhat from their relatively elevated positioning lately," said analyst Jonathan Butler at Mitsubishi in London. 
Spot gold was up 0.5 percent at $1,234.59 per ounce at 1200 GMT while U.S. gold futures for August delivery rose 0.5 percent to $1,233.90 per ounce. 
"If gold remains at $1,230 or goes higher, there's an elevated risk that some of those short positions might start to be reversed and that would give some further upside to gold," Butler added. 
Recent soft U.S. inflation and domestic demand figures undermined arguments for the U.S. Federal Reserve to raise interest rates, with traders cutting back their bets on the likelihood of an increase in December. 
The U.S. dollar nursed losses at a 10-month low against a basket of currencies on Monday as investors cheered upbeat Chinese data by piling into leveraged positions such as the Australian dollar and other high-yielding currencies. 
A weaker greenback supports gold since the dollar-priced commodity is less expensive for investors holding other currencies. – Reuters

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