Gold finds support from weaker US dollar, waits for FOMC minutes

The spot gold price edged higher during Asian trading hours on Tuesday November 22 after finding support from a softer US dollar.

The spot gold price was recently quoted at $1,218.05/1,218.40 per oz, up $2.55 on the previous close. Trade has ranged from $1,215.55 to $1,221.05 so far.

The US dollar index has eased after surging to as high as 101.49 last Friday – this was the highest since April 2003. It was recently at 100.85 on Tuesday, up 0.03% from its previous close.

The US Federal Open Market Committee (FOMC) is due to release its November meeting minutes on Wednesday – investors typically parse its language for hints on the country’s rate hike path.

Market participants currently see a 95.4% chance of a rate increase in December, according to the CME FedWatch Tool.

“With investors’ dual focus on the buoyant equities markets and this Wednesday’s FOMC minutes, gold and the rest of the precious metals have fallen out of favour. Consolidation theme is likely to be the main driver leading into the FOMC minutes,” Commerzbank said late on Monday.

In other commodities, the Brent crude oil spot price rose 0.78% to $49.37 per barrel and the Texas light sweet crude oil spot price increased 0.12% to $48.70 so far on Tuesday.

In equities, the Dow Jones Industrial Average closed 0.47% higher at 18,956.69 on Monday. The Shanghai Composite has so far risen 0.43% to 3,231.96 on Tuesday.

In data, the Chinese CB leading index for October came in at 0.8%, down from 1.2% in September.

It is a light day for data with mainly the US’ existing home sales and Richmond manufacturing index of note later in the day.

In the other precious metals, the spot silver price fell $0.115 to $16.75/16.80 per oz. Platinum at $943/950 per oz was up $8 while palladium increased $6 to $728/734 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 276.30 yuan ($40) per gram, and the June silver was at 4,158 yuan per kilogram. 

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