Gold up on weaker U.S. dollar ahead of FOMC meeting

Gold futures on the COMEX division of the New York Mercantile Exchange rose Monday on a weaker U.S. dollar.

The most active gold contract for December delivery rose 7.6 U.S. dollars, or 0.58 percent, to settle at 1,317.8 dollars per ounce.

Gold was given support as the U.S. Dollar Index rose by 0.2 to 95.83 as of 1915 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions.

Traders are waiting for the results of the September Federal Open Market Committee (FOMC) meeting, scheduled to begin on Tuesday, ending in a Wednesday press conference.

Markets expect that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 12 percent at the September 2016 meeting, 21 percent at the November 2016 meeting, and 55 percent at the December meeting.

The precious metal was prevented from rising further as a report released by the U.S.-based National Association of Home Builders showed that its key Housing Market Index rose by 6 points to a 65-level during the month of September.

Analysts note that this is the best reading of this measure since October 2005.

Gold also came under pressure as the U.S. Dow Jones Industrial Average rose by 18 points, or 0.1 percent as of 1930 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Silver for December delivery rose 42.8 cents, or 2.27 percent, to close at 19.29 dollars per ounce. Platinum for October delivery added 6.1 dollars, or 0.6 percent, to close at 1,023.7 dollars per ounce. Endit