Oct 26, 2016 10:39 NY Time
Bid/Ask 1267.70 / 1268.70
U.S. Dollar Takes Some Shine Away From Gold - OptionsXpress
Monday October 24, 2016 22:09
While gold futures have been a strong performer in 2016, prices lately have run up against some headwinds from the stronger U.S. dollar, says optionsXpress. “A stronger greenback is viewed as a negative for dollar-denominated commodities, as it is more expensive for non-dollar buyers, says Mike Zarembski, senior commodities analyst. “In the case of gold, the prospects of a Federal Reserve interest-rate hike in December and a rising dollar is a double whammy for prices, as owning gold does not pay any dividends and, in fact, has costs associated in owning the physical metal.” However, while gold prices have off from their highs, investors in gold exchange-traded funds have not completely thrown in the towel, the firm says. “In fact, gold prices are holding up relatively well when compared to that of its ‘sister’ in the precious-metals complex—silver--and both are doing stellar when compared to its ‘cousins,’ platinum and palladium,” Zarembski says. “As we head into the final weeks of 2016, many gold traders will be watching closely upcoming economic data for signs regarding whether the Federal Reserve will indeed raise interest rates this year and if so, will it be a ‘one and done’ event or the start of a series of rate hikes by the Fed, which would likely increase the pressure on gold bulls in a rising interest-rate environment.”
By Allen Sykora of Kitco News; asykora@kitco.com
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