STRONGER DOLLAR PUSHES GOLD PRICE LOWER

25/09/2017 15:22 AST

The spot gold price fell during Asian morning trading hours on Monday September 25, as the dollar strengthened and a quiet weekend on the North Korean front saw a further deterioration in any risk-off sentiment.

The spot gold price was recently quoted at $1,292.15-1,292.45 per oz as of 03:58 BST, down $5.20 on the previous session’s close. Trade has ranged from $1,289.6-1,294.05 so far.

A firmer dollar in light of increasing expectations of another US rates rise this year has seen investors’ appetite for the yellow metal wane.

The dollar index was up 0.11% at 92.25 as of 03:58 BST. This compares with the multi-year low of 91.01 seen on September 8.

With the market increasingly expecting another US rates rise by year-end, this should continue to lend support to the dollar.

According to CME Group’s FedWatch tool, which tracks the odds of interest rates in future months, there is a 71.4% probability that the policy board will raise rates to between 1.25-1.5% in December. Several FOMC members will give speeches this week and investors will be keeping a close eye for any hawkish language hinting towards the possibility of another interest rate increase this year.

“Gold opened lower in early Asian trading … as weekend uncertainty passed without incident. Merkel’s win in the German federal elections and a quiet news weekend on the North Korean front, saw the US dollar opening stronger and gold’s weekend safe-haven premium eroded from Friday,” Jeffrey Halley, senior market analyst at Oanda, said.

“The Asian session’s performance will now be dictated by whether most of the weekend risk hedges have already been unwound and geopolitical headlines,’ Halley added.



Silver, PGMs

In the other precious metals, the spot silver price dipped $0.047 to $16.895-16.940 per oz. Platinum rose $3 to $931-936 per oz and palladium gained $6 to $919-924 per oz. On the Shanghai Futures Exchange, gold for December delivery was recently at 277.4 yuan ($42.05) per gram, and the December silver was at 3,859 yuan per kg.

Bullion Desk