Gold prices see first rise in 3 sessions as US dollar weakens

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Gold futures rallied on Tuesday, balancing headwinds from the rise in global equities, as a weaker US dollar helps position precious metal prices for their first gain in three sessions.

Gold prices slowly recovered in October, caught between concerns about rising inflation and fears that central banks might raise interest rates in response, as well as growing concerns about the decline of global economic growth.

“The precious metal is likely to be swayed by conflicting forces this week as investors juggle growth concerns and inflation fears amid the prospect of tightening monetary policy,” Lukman Otunuga wrote, Senior Research Analyst at FXTM, in a note.

The dollar was down 0.3% as measured by the popular ICE US Dollar Index DXY,
-0.28%,
which tracks the strength of the currency against six currencies. A weaker dollar makes dollar-denominated assets comparatively cheaper for foreign buyers.

At the last check, the gold futures contracts for delivery in December GCZ21,
+ 0.37%

GC00,
+ 0.37%
were trading at $ 7.80, or 0.4%, up to $ 1,773.50 an ounce, after falling 0.2% on Monday, its second consecutive decline.

“If the dollar continues to weaken, gold has the potential to replay $ 1,800, a level just above the 100-day, 200-day simple moving average,” Otunuga said. Gold futures hit an intraday high above $ 1,800 on Thursday, but have not stabilized above that level since mid-September.

For now, “intraday bulls appear to be in the lead, with an initial level of interest at $ 1,784,” Otunuga said.

Meanwhile, December silver SIZ21,
+ 3.08%

SI00,
+ 3.08%
was up 75.6 cents, or 3.3%, to $ 24.02 an ounce, after falling 0.4% in the previous session. Prices for the most active contract were on track to surpass $ 24 for the first time since September 9, according to FactSet data.

Closing of the share on Comex, December copper HGZ21,
-0.37%
traded down less than 0.1% to $ 4.724 a pound. January Platinum PLF22,
+ 0.62%
tacked on 0.9% at $ 1,046.70 per ounce and December palladium PAZ21,
+ 3.80%
was trading at $ 2,089 an ounce, up 3.8%.


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