Gold edges higher

LONDON:

Gold edged higher yesterday in thin pre-Christmas trade as the dollar retreated from this week’s 14-year high, tempting some buyers to take advantage of a near 10-month low in prices after six straight weeks of decline. Gold has fallen more than $200 an ounce from its peak hit in the immediate aftermath of Donald Trump’s US presidential election victory on Nov. 8, as his win sparked a dollar rally and drove US Treasury yields higher.

It is down 14 percent this quarter, paring its gain for the year to 6.7 percent. Gold posted its biggest quarterly increase in 30 years between January and March. Spot gold was up 0.2 percent at $1,131.15 an ounce at 1255 GMT, off last week’s low of $1,122.35, while US gold futures for February delivery were up $2.40 an ounce at $1,133.10.

“(Many) traders have closed their books. For them, the year has finished,” LBBW analyst Thorsten Proettel said. “With no real political or economic events to shock markets, and with Asian markets seeing dull demand, I would say not much will happen until January. We see gold holding around $1,130.” Gold remains largely driven by currency effects, he added. “The most important drivers for gold right now are the exchange rate from the dollar to the euro, and real US interest rates.”

The dollar is just over half a percent off highs hit after this month’s Federal Reserve policy meeting, at which the bank surprised markets by indicating interest rates could rise more quickly than expected next year. — Reuters