Gold price under pressure around $1,260/oz from stronger dollar

Gold edged lower on the morning of Tuesday, October 11 in London, with a stronger dollar weighing on the price.

The spot gold price was last at $1,257.25/1,257.55 per oz, down $2.20 on the previous close. Trade has ranged from $1,255.55 to $1,262.20 so far.

The dollar appears to be benefitting after the second US presidential debate between Donald Trump and Hillary Clinton on Monday and from the perception that a Clinton win in the US presidential election would open the way for the Federal Reserve to raise rates in December, National Australia Bank said.

The US dollar index was last 0.35 percent higher at 97.24.

On Monday, the market perceived the likelihood of the Fed instigating a 25-basis-point rise in December at 70 percent, up from 65 percent on Friday, according to the CME FedWatch Group tool.

 “The precious metals remain weak and vulnerable – dollar strength is not helping,” FastMarkets head of research William Adams said. “Given how long the fund longs had become, we are not surprised that there has been stale long liquidation and the selling that has generated has hit the prices hard.”

“But sentiment may not have changed that much unless the gold bulls have not discounted the likelihood of a rate rise at some stage. With the US election looking less uncertain, safe-haven demand may ease, so perhaps gold prices will consolidate for longer,” he added.

In the other precious metals, the spot silver prices was last little changed at $17.585/17.610 per oz. Platinum at $956/961 was down $2 as was palladium at $660/668.  

 

(Editing by Mark Shaw)

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