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Gold up on technical bounce

Xinhua, December 17, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Friday on a technical bounce after a dramatic fall in gold prices on Thursday.

The most active gold contract for February delivery rose 7.6 U.S. dollars, or 0.67 percent, to settle at 1,137.40 dollars per ounce.

A technical bounce from the sharp gold price drop gave support to the precious metal as the market reacted to the Federal Reserve' s rate hike.

Analysts note that the market is preparing to focus on the next 2017 rate hike, since the U.S. economy is in the process of improving. Investors believe the Fed may raise rates from 0.75 to 1.00 during the March FOMC meeting.

According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 4 percent at the February meeting and 26 percent for the March meeting.

Gold was given further support as the U.S Dollar Index fell by 0.22 percent to 102.87 as of 1945 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.

A report released on Friday by the U.S. based National Association of Realtors showed housing starts at a 1.090 level and housing permits at a 1.201 level. Both of these figures were much worse than expected and gave support to the price of gold.

The long-term impact of the Fed' s rate hike kept a cap on the increase of the price of the precious metal and is likely to dominate the market' s thinking for the weeks to come.

Silver for March delivery rose 25.7 cents, or 1.61 percent, to close at 16.215 dollars per ounce.Platinum for January delivery added 40.5 dollars, or 4.3 percent, to close at 934.10 dollars per ounce. Enditem