Gold prices settle high, U.S dollar near a six-year low

Gold prices settle high, U.S dollar near a six-year low

The precious metal prices got cooled off at the last trading session of the past week after a three-day run-up ending with their best week of gains in four.

Traders and global investors increased their hedging bets against the weakening U.S dollar amid renewed emphasis on a US Covid-19 stimulus package deal.

  • The Gold futures contract on New York’s Comex settled closed at $1,840 an ounce.
  • On its performance, W/W, gold futures contract gained about 3%. It was the yellow metal best week since the week ended October 30 as it curbed the significant loss recorded about two weeks ago when it dropped 5% loss, which was the biggest weekly decline since July.
  • The bullion tracked metal or gold spot settled at $1,838.76.
  • For the week, bullion assets gained about 3% too.
  • The precious metal is emerging from one of its worst sell-offs ever, despite positive breakthroughs in Covid-19 drugs and their potential availability before the end of 2020.

What this means: The yellow metal is enjoying strong gains on the bias that the U.S dollar index value was down more as it closed in on a six-year low of 90.47.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the prevailing macro at the gold futures market, stating:

“A rise in inflation expectations (breakeven higher) prompted by signs of inflationary pressures in global PMI reports was encouraging. Month-end expiries and the Comex roll have been dealt with, and the look-see above the 200-day moving average gave optimism.”

The market should refer to the seasonality strength into December. Positioning is cleaner, and snap rallies we have seen in the last 24 hours might be the feature in the next weeks.”

Reporter: Olumide Adesina

Source: Nairametrics

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