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Gold forward prices stabilized Thursday, trading near the record high of several months earlier this week, with moderate dollar trading movements and cautious moves to support the precious metal.
Gold fell on Wednesday and prolonged its decline in after-hours electronic trading, as the US dollar benchmark hit new highs shortly after the hawkish account of the monetary policy meeting was released of the Federal Reserve in September. Two economic reports on the Philadelphia region's economy and jobless claims on Thursday morning did not bother the financial markets by making them forget the Fed's reaction to the publication of the previous day.
Thursday early, December
GCZ8, -0.15%
has changed little, at $ 1,227.40 per ounce compared to Wednesday's close. The contract ended Tuesday at $ 1,231, the highest amount since July 31 for the most active contract, according to data from FactSet. Up to now, gold has risen by almost 3% for the month of October, reducing its fall since the beginning of the year to just over 6%.
ICE US Dollar Index
DXY, + 0.06%
was little changed at 95.62 early Thursday. The dollar index has increased 3.7% since the beginning of the year as a result of tighter monetary policy at the Federal Reserve.
The minutes of the meetings revealed that a majority of senior Fed officials felt that interest rates should continue to rise until the policy becomes restrictive, which could create a some resistance against gold bulls, as rising rates could weigh on the dollar and investment more attractive compared to bullion.
Some analysts are not convinced. "Although they seem ready for a rise in December and maybe three next year, I think the Fed and investors in general will soon realize that there's only a little bit left over." margin for a rate hike, "said Brien Lundin, editor of Gold Newsletter. "Rising rates and increasing federal debt are a toxic mix that will result in debt service costs that will overwhelm the federal budget. As this reality is more widely accepted, I think the price of gold will benefit greatly. "
Inventories and gold have been volatile due to growing concerns over rising Treasury rates
TMUBMUSD10Y, + 0.12%
The rapid rate hike also coincided with the weakness of the US dollar and gold tends to gain as the dollar weakens as assets become comparatively more attractive to buyers using other currency units.
December money
SIZ8, -0.63%
underwent further pressure, ultimately from 8 cents, or 0.6%, to $ 14.58 an ounce.
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