Gold Pares 9-month Low on Dollar’s Descent

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Bullion prices rose higher on Monday trade as dollar pulls back, paring recent losses that hit 9-month lows.

Gold futures for December delivery gained 1.2 percent or $14.50 to $1,192.80 an ounce following Friday’s trade with the lead contract losing 0.9 percent to$1,179 an ounce. The previous week met losses of about 2 percent.

The greenback extended losses following a hit of its 14-year high last week.

For DailyFX senior currency strategist Ilya Spivak, Monday’s gold prices “are attempting a recovery after touching a nine-month low in Friday’s trade. The move is accompanied by a parallel decline in the U.S. dollar and U.S. front-end yields as implied in 2-year Treasury futures.”

“This hints at moderation in the Fed rate hike outlook as the catalyst behind the returning appeal of anti-fiat and non-interest-bearing assets, including the yellow metal,” he added in his blog.

Gold for immediate delivery prices hit their lowest since February at $1,171.21 on Friday. The precious metal has also fallen 7 percent so far this month, as the greenback and bond yields surge over increased market outlook over enlarged fiscal spending by US President-elect Donald Trump.

As no interest is paid in gold, the surging returns from US bonds and other markets prove to be disruptive with the metal’s movement.

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The ICE US Dollar Index which measures the greenback against six major currencies dipped 0.4 percent at 101.08 on Monday trade. The dollar’s surge can hurt dollar-denominated prices for the bullion and other commodities.

However, bullion gains are expected to be short-lived since “momentum indicators remain negatively configured and there is little to suggest that a recovery will be any more than another opportunity to sell,” noted Hantec Markets market analyst Richard Perry.

Meanwhile, December silver went with an uptick of 20 cents or 1.2 percent to $16.67 an ounce after pushing a bear market last week.

Platinum for January delivery rose by 1 percent or $8.70 to $917.310 an ounce while December palladium changed hands $12.35 or 1.7 percent to $753.40 an ounce.

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