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Gold futures rise on weaker U.S. equities, dollar

Xinhua, January 18, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as the U.S. dollar and U.S. equities weakened in the wake of a comment by U.S. President-Elect Donald Trump.

The most active gold contract for February delivery rose 16.7 U.S. dollars, or 1.4 percent, to settle at 1,212.90 dollars per ounce.

U.S. President-Elect Donald Trump told the Wall Street Journal in an interview on Friday that he believed the U.S. dollar was too strong. The U.S. Dollar Index fell by 1.22 percent to 100.33 as of 1825 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.

Additionally, the U.S. Dow Jones Industrial Average fell by 94.97 points, or 0.48 percent as of 1825 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.

Gold was given additional support as traders are also concerned over the fallout in the Eurozone from the United Kingdom's exit of the EU, as U.K. Prime Minister Theresa May committed to bringing Brexit to a vote in the U.K. parliament.

This week will see a shortened trading week as the U.S. Martin Luther King Jr. holiday resulted in the markets closing on Monday. The consumer price index and industrial production reports are due on Wednesday, housing starts, weekly jobless claims, and Philadelphia Fed business outlook reports are due on Thursday, and no economic reports are expected on Friday.

Silver for March delivery rose 38.3 cents, or 2.27 percent, to close at 17.148 dollars per ounce. Platinum for April delivery fell 3.3 dollars, or 0.33 percent, to close at 983.10 dollars per ounce. Endit