Gold up on weaker U.S. economic data
Xinhua, December 29, 2016 Adjust font size:
Gold futures on the COMEX division of the New York Mercantile Exchange rose on Wednesday as U.S. equities and economic data showed weakness.
The most active gold contract for February delivery rose 2.1 U.S. dollars, or 0.18 percent, to settle at 1,140.90 dollars per ounce.
Gold was given support as the U.S. Dow Jones Industrial Average fell by 94 points as of 18:10 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.
The precious metal was given further support as a report released by the U.S.-based National Association of Realtors on Wednesday showed its pending home sales index falling by 2.5 percent, a figure which analysts note was much worse-than-expected and was mainly based on weakness in the western United States. The same analysts continue to note a lack of supply in the housing market.
A cap was kept on gold's gains as the U.S. Dollar Index rose by 0.27 percent to 103.32 as of 18:30 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.
Investors are expecting low trading activity in the week ahead as historically traders take the week off between the U.S. Christmas holiday and New Years, but the international trade in goods and weekly jobless claims are due on Thursday, and the Chicago PMI on Friday.
Traders have not yet begun to pay attention to the timing of the next Fed rate hike, as the U.S. central bank' s rate hike just passed during the December Federal Open Market Committee (FOMC) meeting, but investors believe the Fed may raise rates from 0.75 to 1.00 during the March FOMC meeting at the earliest.
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 25 percent for the March meeting.
Silver for March delivery rose 4.9 cents, or 0.31 percent, to close at 16.038 dollars per ounce. Platinum for January delivery fell 4.5 dollars, or 0.50 percent, to close at 899.60 dollars per ounce. Enditem