Gold futures rose on Tuesday, giving up early losses to trade back above $1,700 an ounce for the first time in about a month, supported by a weaker U.S. dollar and Treasury yields.
Investors also awaited US consumer price inflation data for October, which is likely to help guide the Federal Reserve’s next decision on monetary policy.
Gold futures for December delivery
rose $34.50, or 2.1%, to $1,715 an ounce on the Comex. Prices for the most active contract have not settled above $1,700 since Oct. 7, FactSet data showed.
rose 67.6 cents, or 3.2%, to $21.595 an ounce.
added $18, or 1%, to $1,915.50 an ounce, while platinum in January
rose $20.70, or 2.1%, to $1,010.10 an ounce.
Honey for January
delivery rose 8.7 cents, or 2.4%, to $3.69 a pound.
What is happening
Gold and silver futures edged higher on Tuesday, shaking off early declines as the U.S. dollar retreated and Treasury yields weakened.
The US Dollar Index ICE
fell nearly 7 points to 4.141%.
The weakness of the dollar makes goods priced in the unit cheaper for consumers of other currencies. Meanwhile, lower yields lower the opportunity cost of holding unmarketable gold against government bonds.
Chintan Karnani, director of research at Insignia Consultants in New Delhi, attributed the rise in gold prices to dollar weakness as well as “technical buying” as gold managed to trade above its 50-day moving average. The 50-day moving average for December gold stood at $1,680.99, according to FactSet data.
Gold also saw short covering as prices broke above $1,700, Karnani told MarketWatch.
December gold is now “meeting resistance” at the 100-day moving average, he said. FactSet pegged the 100-day moving average at $1,731.16.
A closely watched October inflation report is due on Thursday, p expect economists the consumer price index, which shows that prices have increased by 7.9% year-on-year.