Gold prices edge higher as US dollar pulls back
London (Oct 12) Gold prices edged higher on Wednesday, helped by a mild pullback from the U.S. dollar but the precious metal remained close to four-month lows amid growing expectations for a 2016 rate hike by the Federal Reserve.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were up 0.09% at $1,275.15, not far from Friday’s four-month trough of $1,249.50.
The December contract ended Tuesday’s session 0.36% lower at $1,255.90 an ounce.
Futures were likely to find support at $1,249.50 and resistance at $1,265.30, the high from October 6.
Market participants were waiting for the minutes of the Fed’s September policy meeting for hints on the central bank’s future policy moves.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
But demand for the U.S. dollar still remained broadly supported, as the odds for a December rate hike passed the 70% threshold on Tuesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.13% at 97.59, just off Tuesday’s seven-month peak of 97.75.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere in metals trading, silver futures for December delivery gained 0.42% to $17.582 a troy ounce, while copper futures for December delivery slipped 0.21% to $2.181 a pound.
Source: Investing.com
