Gold prices rose on Tuesday, buoyed in part as jitters surrounding Italy’s financial picture filtered into broader financial markets.
“Gold and silver prices are modestly up in early U.S. trading as there is some risk aversion in the marketplace coming from the European Union,” said Jim Wyckoff, senior analyst at Kitco.com, calling out Italy’s budget woes and the chance for a clash with the EU, in particular.
“Gold and silver bulls are especially encouraged with their metals are higher today even as the U.S. dollar index hit a six-week high overnight,” he said.
December gold
GCZ8, +1.11%
was up $3.40, or 0.3%, at $1,195.40 an ounce. Gold futures fell 4.6% for the third quarterdown 0.9% for last month, FactSet data showed. Based on the most-active contract’s settlement of $1,254.50 on June 29, prices lost 4.6% for the third quarter. They’re down roughly 10% for the year so far.
The yellow metal was knocked back to six-week lows in recent sessions as the ICE U.S. Dollar index
DXY, +0.26%
revived its 2018 march higher, including a 0.3% increase Tuesday.
Beyond the haven boost, interest rates remain the chief driver for precious metals. They’re sensitive to Federal Reserve interest-rate increases because they can push up U.S. bond yields, which can reduce the attraction of nonyielding bullion, and tend to boost the dollar, which makes gold more expensive for buyers using other currencies.
The Fed is expected to raise its benchmark rate for a fourth time this year in December and expectations for that move and any further tightening could be informed by Friday’s payrolls data, particularly its wage component.
Financial markets will hear from Fed Chairman Jerome Powell in a speech at the National Association for Business Economics conference in Boston at noon Eastern. Speeches from vice chair Randal Quarles and Dallas Fed President Rob Kaplan are on deck as well.
Meanwhile, December silver
SIZ8, +1.88%
rose 9 cents, or 0.6%, to $14.60 an ounce, stabilizing after posting a drop of more than 9% in the third quarter.
Also read: Palladium may soon be worth more than gold
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Source : MTV
