Dollar weakness usually benefits gold.
Dollar weakness usually benefits gold.

Gold Prices Move Above $1,300

Gold Prices Move Above $1,300

Gold prices crossed above the key $1,300-level on Monday, as the US dollar sank to its lowest in more than a year after Federal Reserve Chair Janet Yellen’s speech at Jackson Hole made no reference to US monetary policy.
Yellen’s speech at the annual meeting of central bankers in Jackson Hole, Wyoming on Friday focused on financial stability while giving no hint on monetary policy, leaving the prospect of more interest rate hikes up in the air, investing.com reported.
She said the reforms put in place after the 2007-2009 financial crisis have strengthened the financial system, without impeding economic growth.
The dollar index was down 0.1% against a basket of six major currencies at 92.38, adding to Friday’s losses. It fell to its lowest since early May 2016 at 92.30 earlier.
Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Comex gold futures tacked on $5.30, or around 0.4%, to $1,303.30 a troy ounce, not far from an eight-month peak of $1,306.90 touched earlier in August.
Gold prices finished last week up 0.5%. The yellow metal has been well-supported in recent weeks as US political developments kept investors on edge and supported safe-haven demand.
Global financial markets will focus on this week’s US employment report to gauge how it will impact the Federal Reserve’s view on monetary policy through the end of the year.
In addition, market players will keep an eye out on a revised reading of second-quarter US growth for further hints on the strength of the world’s largest economy.
This week’s calendar also features US data on personal income and spending, which includes the personal consumption expenditures inflation data, the Fed’s preferred metric for inflation.
Reports on Institute for Supply Management manufacturing sector activity, CB consumer confidence, ADP private sector payrolls and monthly auto sales figures are also on the agenda.
Markets remain skeptical the Fed will raise rates a third time this year due to worries over the subdued inflation outlook, but it is widely expected to start the process of reducing its balance sheet by September.
Elsewhere on the Comex, silver futures gained 13.1 cents, or around 0.8%, to $17.18 a troy ounce.
Among other precious metals, platinum rose 0.5% to $984.30, while palladium inched up 0.3% to $928.88 an ounce.

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