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Gold down on stronger U.S. dollar

Xinhua, November 1, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday as the U.S. dollar strengthened.

The most active gold contract for December delivery fell 3.7 U.S. dollars, or 0.29 percent, to settle at 1,273.10 dollars per ounce.

Gold was put under pressure as the U.S. Dollar Index rose by 0.03 percent to 98.37 as of 1815 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The precious metal was prevented from falling further as the U.S. Dow Jones Industrial Average fell by 22 points, or 0.12 percent as of 1815 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.

A report released on Monday by the U.S. Department of Commerce showed personal income increasing by 0.3 percent, slightly lower than consensus, but still within the consensus range. Analysts note strength in consumer spending, which increased by 0.5 percent, which was on the high end of expectations.

Traders are waiting for the release of the the Federal Open Market Committee meeting minutes due on Wednesday, along with several pieces of economic data due later this week.

Investors believe 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 6 percent for the November 2016 meeting, and 73 percent at the December meeting.

Silver for December stayed unchanged at 17.796 dollars per ounce. Platinum for January delivery fell 2.8 dollars, or 0.29 percent, to close at 978.60 dollars per ounce. Endit