Gold futures edge higher as U.S. dollar eases
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold prices on Monday began a new week on a positive note, adding to the modest gains recorded Friday as the U.S. dollar weakened and amid expectations that Japan may pursue inflation more aggressively after the upcoming general elections.
Gold futures for delivery in December (CNS:GCZ2) climbed $7.90, or 0.5%, to $1,722.60 an ounce in electronic trading. The metal had added less than $1 during Friday’s regular session on the Comex division of the New York Mercantile Exchange.
Monday’s advance came as the ICE dollar index (NYE:DXY) , a measure of the greenback’s performance against a basket of six other major currencies, fell to 81.074 from 81.286 late in North America on Friday.
Gold prices have been subject to volatility as U.S. political leaders made efforts to reach to avert the “fiscal cliff,” an event that threatened to drag the economy into recession. Gold often drops on the dollar’s strength, but also tends to gain during times of uncertainty, as the metal is widely regarded as a store of wealth.
Meanwhile, Japanese stock markets extended their rally as the yen weakened on hopes for a more relaxed monetary policy to pull the country from an era of falling prices. Monetary easing and higher inflation usually support gold prices.
Elsewhere in the metals complex, December silver (CNS:SIZ2) rose 0.8% to $32.63 an ounce, and December palladium (NYMEX:PAZ2) gained 0.6% to $630.20 an ounce.
Copper futures for delivery in December (CNS:HGZ2) added 0.6% to $3.47 a pound, while January platinum prices (NYMEX:PLF3) climbed 0.4% to $1,568.40 an ounce.
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