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1st LD Writethru: Gold edges up on weaker U.S. dollar

Xinhua, November 10, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose slightly as the U.S. dollar fell on profit-taking following a rally in the previous session.

The most active gold contract for December delivery added 0.4 U.S. dollars, or 0.04 percent, to settle at 1,088.10 dollars per ounce.

The precious metal moved up a little after the U.S. dollar index, a measure of the dollar against a basket of major currencies, fell by 0.3 to 98.94 as of 17:15 GMT. Gold and the dollar typically move in opposite directions, as a strong dollar will hurt the appeal of the gold, measured by the greenback.

However, pressure from a much-anticipated rate hike by the U.S. Federal Reserve put a check on the further climb of gold.

The CMEGroup's Fedwatch tool indicated a 68-percent chance for a 0.5-percent rate hike during the December Federal Open Market Committee (FOMC) meeting.

The probabilities, analysts said, are much higher than previous forecasts, which ranged from approximately 20 to 30 percent. Expectations are running high after Fed signaled a possible rate increase at its next meeting in December after its October meeting.

A rate hike is bearish for gold as it will drive investors away from gold and toward assets with a return, as the precious metal bears no interest.

Analysts will keep a close eye on economic data, including employment and inflation figures, two key gauges to determine the timing of the rake increase.

The economy added 271,000 new jobs in October, at the fastest pace this year, the government said on Friday. The unemployment rate also fell to 5 percent, the lowest level since April 2008. The better-than-expected jobs data significantly boosted expectations for a rate hike.

With Producer Price Index and retail sales due out on Friday, analysts believed that if the reports point to steady inflation, a rate hike in December is very likely.

Silver for December delivery fell 27.8 cents, or 1.89 percent, to close at 14.413 dollars per ounce. Platinum for January delivery fell 25.6 dollars, or 2.72 percent, to close at 914.40 dollars per ounce. Enditem