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Gold futures rise to 2-month high as U.S. dollar weakens

Xinhua, January 24, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose to a two-month high on Monday, as unease over economic policies of U.S. President Donald Trump pushed investors towards safer assets while the dollar fell.

The most active gold contract for February delivery rose 10.7 U.S. dollars, or 0.89 percent, to settle at 1,215.60 dollars per ounce.

Gold was given support as the U.S. dollar reacted to comments made by Trump during his inauguration speech on Friday. Trump told Americans that he intended to re-negotiate trade deals, potentially impacting global trade.

The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, fell by 0.48 percent to 100.15 as of 1915 GMT.

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 U.S. Dow Jones Industrial Average fell by 35 points, or 0.18 percent as of 1915 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.

Traders are waiting for the release of the PMI marketing flash, and existing home sales on Tuesday, international trade in goods and weekly jobless claims on Thursday, gross domestic product, and durable goods orders on Friday.

After Trump's inauguration on Friday, investors have displayed increased uncertainty over the timing of the next Federal Reserve rate hike. Traders 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 2 percent at the February meeting and 15 percent for the March meeting.

Silver for March delivery rose 15.4 cents, or 0.90 percent, to close at 17.186 dollars per ounce. Platinum for April delivery added 3.9 dollars, or 0.40 percent, to close at 979.90 dollars per ounce. Endit