Off the wire
• Neymar: I don't play for individual awards  • FOCAC shows China intent to promote win-win cooperation with Africa  • Urgent: British PM to call parliament vote on airstrikes in Syria on Wednesday  • Three top Kenyan athletics officials suspended in graft probe  • Body of killed Russian Su-24 pilot arrives in Russia  • Foreign exchange rate of Euro to other currencies  • Germany's benchmark DAX index closes up  • Over 47 million anti-personnel mines destroyed since 1999  • Urgent: Gold up on technical trading  • Kenya university terror drill causes unexpected death, panic  
You are here: 　 Home

1st LD Writethru: Gold up on technical trading

Xinhua, December 1, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday on a technical trading bounce, despite a stronger U.S. dollar.

The most active gold contract for February delivery added 9.1 U.S. dollars, or 0.86 percent, to settle at 1,065.30 dollars per ounce.

In November, based on the most-active contracts, gold futures lost 76.1 dollars, roughly 6.67 percent. According to MarketWatch, this is their largest monthly percentage drop since June 2013.

October's pending home sales index is up only 0.2 percent, the National Association of Realtors said Monday. Some analysts noted that this soft data was sharply lower than expectations, boosting demands of gold on Monday.

Additionally, analysts noted that gold hit a key support level then rebounded Monday.

However, the precious metal remains near a six-year-low, as an increase in the Federal Reserve's key interest rate is likely to occur during the December Federal Open Market Commitee (FOMC) meeting on Dec. 15, according to analysts.

Expectations were originally for a delay in the rate hike until 2016 but the FOMC meeting in late October confirmed that the Fed wants to raise rates before the end of 2015.

An increase in the Fed's interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest. There has not been an increase in the Fed's interest rate since June 2006, before the beginning of the American financial crisis.

According to the CMEGroup's Fedwatch tool, the current implied probability of a rate hike during the December FOMC meeting are unchanged, at 78 percent, which is much higher than in recent months, where the chances were as low as 40 percent. Traders will watch the economic data due out later this week very closely for clues on the Fed's thought process.

Manufacturing data is due out on Tuesday, the weekly jobless claims is due on Thursday, and the big November jobs report, as well as the international trade report is due out on Friday.

Analysts believed that the market has now fully factored in the expected December rate hike, and that the market is now unsure of when the next rate hike, from a 0.50 rate to a 0.75 rate, will occur.

The Fedwatch tool shows an implied probability indicating that the market believes that the Fed may raise rates from 0.50 to 0.75 during the March FOMC meeting. The current implied probability of a hike from 0.50 to 0.75 is at 38 percent at the March meeting, and 11 percent at the January meeting.

Silver for March delivery added 3.8 cents, or 0.27 percent, to close at 14.086 dollars per ounce. Platinum for January delivery dropped 2.9 dollars, or 0.35 percent, to close at 832.90 dollars per ounce. Endit