💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

PRECIOUS-Gold pares gains as focus back on U.S. rate hike expectation

Published 17/11/2015, 06:19 am
© Reuters.  PRECIOUS-Gold pares gains as focus back on U.S. rate hike expectation
XAU/USD
-
XAG/USD
-
GC
-
PA
-
PL
-
DXY
-

* Gold rebounds from six-year low, pares some gains

* U.S. dollar rises as fears fade after Paris attacks

* Platinum turns up after tapping 7-year low (Recasts, updates trading, adds comment, byline, NEW YORK dateline)

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON, Nov 16 (Reuters) - Gold pared gains on Monday, after an initial flow of safe-haven buying following the attacks in Paris slowed down and investors' focus returned to expectations for the U.S. Federal Reserve to raise interest rates in December.

Spot gold XAU= rose as much as 1.4 percent to a 10-day high of $1,097.90 an ounce, and was up just 0.1 percent at $1,083.76 at 2:01 p.m. EST (1901 GMT), hovering above last week's six-year low at $1,074.26.

U.S. gold futures for December delivery GCcv1 settled up 0.3 percent at $1,083.60 an ounce.

"The French are making fairly good progress with the arrests, with the raids. I think the market is turning its attention to the fundamentals of the market," said Rob Haworth, senior investment strategist for U.S. Bank Wealth management in Seattle.

"We're seeing increased risk but the fundamentals that are driving the Fed really are bigger factors and don't seem dissuaded." urn:newsml:reuters.com:*:nL8N13A0D1

In the first 10 minutes of trading Monday, nearly 3,000 lots changed hands, almost 10 times the 300-lot average for the opening 10 minutes over the past two months, Reuters' calculations showed.

"Gold opened higher early this morning on the back of what happened over the weekend on perceived geopolitical risk, but it seems to be already short-lived because the bigger macroeconomic issues are the dollar's strength and the (expected) U.S. rate hike," Citi strategist David Wilson said.

The dollar .DXY rose against major currencies and U.S. and European equity markets gained modestly, as markets grew more convinced the Fed will raise interest rates next month and investor worries faded over Friday night's attacks in Paris. USD/ MKTS/GLOB

Before Monday's gains, gold had fallen for 12 sessions out of 13 on increasing bets that the Fed would raise U.S. interest rates next month, which would increase the opportunity cost of holding the non-yielding asset.

Gold is typically seen as a safe investment during times of uncertainty. However, there has not been an increase in demand from retail investors since the Paris attacks, German coin dealer Degussa said in an emailed statement.

"(Buying was) already relatively high throughout last week, but the reason for that was clearly the most recent price drop," the statement said.

Tracking gold, the platinum group metals gained. Platinum XPT= was up 1.1 percent at $883.75, after falling to $851, the lowest since December 2008. Palladium XPD= climbed 1.7 percent to $545, rising for the first time in six sessions.

Silver XAG= was flat at $14.24 an ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.