Gold Price Rises on Weaker Dollar

New York (Nov 21)  Monday’s move came on the heels of a 4.7% decline in gold prices this month, as fading political uncertainty and increasing expectations that the Federal Reserve will soon raise interest rates dragged the metal to its lowest level since February.

Gold pays nothing to its holders and struggles to compete with yield-bearing investments when rates rise.

Holdings at SPDR Gold Trust, the largest gold-focused exchange-traded fund, have slipped nearly 3% this month to 915.29 metric tons, the lowest level since June.

Looking forward, “gradually increasing interest rates and a stronger dollar call for a continued decline in prices,” said Carsten Menke, an analyst at Julius Baer, in a note to clients.

Federal-funds futures, used to bet on central bank policy, on Monday showed that investors assigned a 95.4% likelihood of a rate increase in December.

Silver for December delivery rose 0.4% to $16.69 a troy ounce. January platinum rose 1.4% to $934.50 a troy ounce. December palladium was up 0.2% at $732.25 a troy ounce.

Source: WSJ