Gold Prices Fall as Dollar Rises
November 20 2017 - 11:14AM
Dow Jones News
By Amrith Ramkumar and David Hodari
Gold prices fell Monday as the dollar recovered.
Gold for December delivery declined 0.8% to $1,285.70 a troy
ounce on the Comex division of the New York Mercantile Exchange.
After its best day since May Friday, the precious metal closed at
its highest level in a month with the dollar falling.
However, the dollar bounced back Monday following a second
straight week of declines, making gold and other dollar-denominated
commodities more expensive for foreign buyers. The WSJ Dollar
Index, which tracks the dollar against a basket of 16 other
currencies, was up 0.2% Monday.
Gold prices are roughly 4.5% below their year-to-date highs from
September, weighed down by a stronger dollar and interest-rate
concerns.
"The trend has been paying attention to the dollar market," said
Rob Haworth, senior investment strategist at U.S. Bank Wealth
Management. "What's interesting to me is it seems like speculators
are trying to be bullish...The fundamentals seem to be against
them."
The latest data from the Commodity Futures Trading Commission
released Friday showed that net bets on higher gold prices by hedge
funds and other speculative investors rose to their highest level
in six weeks during the week ended Nov. 14.
The euro edged down against the dollar Monday after negotiations
to form the German government broke down, weighing on gold prices.
Investors were also monitoring news out of Washington related to
the Republican tax bill's progress in the Senate, as concerns about
the bill passing have impacted the dollar in recent sessions.
Some analysts have said signs of geopolitical turbulence could
also keep gold prices near $1,300 because many investors believe
gold and other haven assets will hold their value better if markets
turn rocky.
Investors will also be paying close attention to central-bank
signals and signs of inflation in the U.S. ahead of the Federal
Reserve's December meeting. A rate increase is widely expected next
month, but some traders will be watching for clues about the
central bank's plans moving forward because gold struggles to
compete with yield-bearing assets like Treasurys as borrowing costs
rise. Minutes from the Fed's last meeting are scheduled to be
released Wednesday.
Among base metals, copper for December delivery inched up 0.1%
to $3.0695 a pound. The industrial metal's rally has largely
stalled in recent weeks with prices roughly 6% off their three-year
highs from last month amid demand concerns surrounding China, the
world's largest consumer. Still, copper has gained more than 20% in
2017.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David
Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
November 20, 2017 10:59 ET (15:59 GMT)
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