Gold
futures settled higher Monday to recoup some of what they lost in the
previous session, as investors set their sights on the crucial Federal
Reserve decision on interest rates due out later this week.
As
far as the Federal Reserve is concerned, if the central bank sends out a
dovish signal on Thursday, this may help to boost stocks and undermine
the dollar. Gold may benefit as lower rates for longer would decrease
the relative opportunity cost for holding the metal,” said Fawad
Razaqzada, analyst at Forex.com, in a Monday research note.
Investors
appear divided on the likelihood of a rate increase the first since
2006 but gold is finding some support from traders who view the
probability of the Fed ending its ultraloose monetary policy this month
as low.
Low
rates are beneficial to gold, which doesn't bear interest. Looser
monetary policy for longer may keep the value of the dollar in check,
offering dollar-denominated gold buyers reason to be bullish because a
weaker buck makes the metal less expensive to buyers in other
currencies.
Against this backdrop, gold for December delivery added $4.40, or 0.4%, to settle at $1,107.70 an ounce on Comex, after capping its third straight weekly loss Friday. Prices lost 0.5% in the previous session.
In
other metals, December silver fell 14.2 cents, or 1%, to $14.363 an
ounce. High-grade copper for December delivery lost 4.8 cents, or 2%, to
end at $2.406 a pound.
October
platinum settled down $9.50 cents, or 1%, to $955.40 an ounce, while
December palladium lost $3.20, or 0.5%, to $587.80 an ounce.
Source : MarketWatch
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