Gold stays checked by strong US dollar

The spot gold price inched higher but stayed capped by a strong US dollar during Asian trading hours on Tuesday November 15.

The spot gold price was recently quoted at $1,224.70/1,225.10 per oz, up $1.20 on the previous close. Trade has ranged from $1,222.80 to $1,231.30 so far.

The US dollar index surged to 100.22 on Monday – the highest since December 3 2015.

“The climbing dollar had been the trend of late and the latest surge overnight seems to suggest there is no stopping the rally,” Jingyi Pan, a market analyst at IG, said.

The drivers for the US dollar rally lies with the high probability of an imminent Fed rate hike and the strong expectations for future hikes, driven by the potential shift towards fiscal stimulus from the incoming Donald Trump administration, Pan said.

Market participants on Monday saw an 86% chance of a US rate hike in December, up from 81% last Friday, according to the CME FedWatch Tool.

Gold faces further short-term pressure amid expectations of faster growth in the US via accelerated infrastructure investment pledged by president-elect Donald Trump, Metal Bulletin Research analyst, James Moore, said.

“But we are not overly bearish, given the potentially inflationary implications of Trump’s policies. Pending elections in Europe could also create further market jitters given the anti-establishment votes in the UK and US.”

In data, US core retail sales, retail sales, Empire State manufacturing index, import prices and business inventories are due later today.

In other commodities, the Brent crude oil spot price rose 1.09% to $45.19 per barrel and the Texas light sweet crude oil spot price increased 1.1% to $44.14 recently on Tuesday.

In equities, the Shanghai Composite slipped 0.27% to 3,201.56 recently on Tuesday.

In the other precious metals, the spot silver price rose $0.102 to $17.06/17.065 per oz. Platinum at $940/945 per oz was up $12 while palladium increased $3 to $696/701 per oz.

On the Shanghai Futures Exchange, gold for June delivery was last unchanged at 275.55 yuan ($40) per gram, and the June silver was flat at 4,141 yuan per kilogram.

The post Gold stays checked by strong US dollar appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2eZlXOF
via IFTTT