Gold rises to close to $1,200/oz as US dollar weakens

The spot gold price rose to close to $1,200 per oz during Asian trading hours on Monday November 28 as the US dollar weakened.

The spot gold price was recently quoted at $1,194.85/1,195.25 per oz, up $11.10 on the previous close. Trade has ranged from $1,187.05 to $1,197.70 so far.

“Gold has traded well bid on the back of the US dollar weakness, breaking through Friday’s London high to test toward $1,195 in early Shanghai trade,” MKS Group said on Monday morning.

The broker sees support for the yellow metal at around $1,180 and resistance at $1,200, and then $1,210.

The US dollar index fell as low as 100.63 on Monday, this was the lowest since November 22. It was recently at 100.79, down 0.68%.

“Clearly the US dollar rally across November has been very strong and some short-term consolidation is likely,” Credit Suisse said in a report on Monday.

“However, our macro team sees upside risks to US growth, inflation and possibly a stronger pace of Fed hikes next year. As such, US dollar strength will likely remain dominant across 2017,” the bank said.

The US Federal Open Market Committee will announce its Federal Funds rate on December 14 – 93.5% of market participants expect the FOMC to announce a rate hike on the day, according to the CME FedWatch Tool. 

In US data released Friday, the goods trade balance disappointed at -$62 billion while preliminary wholesale inventories were better than expected at -0.4%. The flash services PMI disappointed at 54.7.

It is a quiet day for data on Monday with mainly the Eurozone’s M3 money supply and private loans due later.

European Central Bank president Mario Draghi is set to speak at the European Parliament’s Economic Committee in Brussels later today.

In other commodities, the Brent crude oil spot price climbed 0.44% to $47.30 per barrel recently in the day.

In equities, the Shanghai Composite rose 0.26% to 3,270.40 so far today.

In the other precious metals, the spot silver price increased $0.265 to $16.77/16.79 per oz. Platinum at $917/922 per oz was up $16, and palladium gained $15 to $743/748 per oz.

On the Shanghai Futures Exchange, gold for June delivery was recently at 275 yuan ($40) per gram, and the June silver was at 4,223 yuan per kilogram.

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