Gold edges higher as US dollar softens

The spot gold price edged higher during Asian trading hours on Monday November 21 as the US dollar softened after its rally last week.

The spot gold price was recently quoted at $1,212.35/1,212.75 per oz, up $4.10 on the previous close. Trade has ranged from $1,206.85 to $1,214.15 so far.

The US dollar index fell 0.14% to 101.21 recently on Monday – it had surged as high as 101.49 last Friday.

Should the US dollar continue to rally, however, gold is likely to remain under pressure, analysts said.

“As long as the dollar continues to strengthen, there seems little chance of a turnaround [for gold],” Chris Beauchamp, a market analyst at IG, said.

“There is some potential support at $1,190, but below here we could see a swift drop to $1,070. Oversold conditions persist, but we’ll need a move above $1,230 to confirm a bounce is in play,” he said.

The US dollar has strengthened alongside increasing expectations of a US rate hike in December.

Fed officials who spoke last Friday had indicated that rates should go up next month and that the Fed could adjust its outlook as and when more details of president-elect Donald Trump’s policies become visible, ANZ Research said on Monday morning.

“The market is almost fully priced for a rate hike in December at 98%,” the bank noted.

In other commodities, the Brent crude oil spot price rose 1.28% to $47.39 per barrel and the Texas light sweet crude oil spot price gained 2.83% to $46.85 per barrel so far on Monday.

In equities, the Shanghai Composite rose 1.1% to 3,228.10 recently on Monday.

It is a light day for data with mainly China’s CB leading index of note later in the day.

In the other precious metals, the spot silver price fell $0.105 to $16.645/16.67 per oz. Platinum at $918/928 per oz was up $3 while palladium increased $2 to $722/727 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 274.75 yuan ($40) per gram, and the June silver was at 4,113 yuan per kilogram.

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