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Gold climbs to over 1-month high on weaker US dollar
GOLD prices gained on Tuesday, after hitting a more than one-month high earlier in the session, as the dollar slipped after the United States and China agreed to a temporary truce in their trade conflict that rattled global markets.
Spot gold rose 0.5 per cent to US$1,237.21 per ounce early this morning. Prices touched a peak of US$1,238.20 earlier in the session, their highest since Oct 26. US gold futures were up 0.3 per cent at US$1,242.9 per ounce.
"After the G-20 summit, safe haven buying in the dollar index has reduced, therefore gold is looking very strong," said Vandana Bharti, assistant vice-president of commodity research, SMC Comtrade Ltd, adding that US$1,250 is the next target for the bullion.
The dollar weakened against its major peers on Tuesday, as the thaw in trade tensions between Washington and Beijing supported investor confidence in riskier assets, while the greenback was further pressured by US Treasury yields that fell to three-month lows.
Analysts now expect market focus to move to the US Federal Reserve's monetary policy. Markets are expecting a fourth rate hike at its Dec 18-19 meeting. Gold has fallen about 10 per cent from a peak in April as investors preferred the dollar as safe haven, with US-China trade friction unfolding against a backdrop of higher US interest rates.
The precious metal is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. They also boost the dollar, in which the metal is priced. REUTERS