Gold prices closed up modestly on Tuesday as weakness in the U.S. dollar delivered a boost to the yellow metal.
December gold rose $5.40, or 0.4%, to settle at $1,346.70 an ounce, ending two consecutive sessions of losses for gold.
Technical traders said some short-covering, or buying back borrowed securities to close an open short position, emerged in the futures market to account for some of Tuesday’s rebound.
Gold prices have been subdued since last week’s stronger-than-expected July jobs report pushed down precious metals prices as expectations for a U.S. interest-rate hike in 2016 increased. So far this month, gold futures are off about 0.8%, but year to date are up 27%, underpinned by global economic uncertainty and bets that the rates will stay lower for longer.
The CME Group’s Fed Watch tool, which tracks pricing in short-term interest-rate futures, puts the chance of a rate increase by year-end at about a coin toss. That is up from a 30% chance for such a scenario priced in before last week’s stronger-than-expected July jobs report. Tuesday’s relatively thin economic calendar could extend the wait for fresh, market-moving data.
Meanwhile, new buyers for precious metals have emerged since Friday’s data-induced volatility, analysts said.
“There has been record buying of gold ETFs since Friday and this is sign of a healthy market,” said Maxwell Gold, director of investment strategy for ETF Securities. Some investors see the pullback in prices as a good buying opportunity. According to Gold, new players, such as private wealth managers, are beginning to enter the market, and there is potential for more demand from this group.
The exchange-traded fund SPDR Gold Trust ended 0.4% higher Tuesday, while the silver ETF iShares Silver Trust gained 0.7%.
Click Here To Register For Free Trial Services
OR
Give A Missed Call : +6531581402
Follow Us On Twitter : www.twitter.com/epicresearchsg
Like Us On Facebook : www.facebook.com/EpicResearchSingapore
Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
