By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Gold futures rebounded in electronic trading Monday, as a softer dollar encouraged investment in commodities.
Gold for August delivery GC1Q +0.80% gained $11.20, or 0.8%, to $1,493.80 an ounce on the Comex division of New York Mercantile Exchange during Asian trading hours.
Over the weekend European Finance ministers approved a critical loan installment to debt-stricken Greece, which helped buoy the euro against the dollar. Read more about Greece.
The dollar index DXY +0.10% , which measures the performance of the U.S. unit against a basket of six major currencies, traded at 74.303 from 74.371 in late North American trading on Friday. Read more about currencies.
A softer greenback tends to encourage buying in dollar-priced commodities including metals.
“Interest rate differentials could keep the dollar weak, providing additional support for metals this year,” analysts at Phillip Futures said.
The European Central Bank (ECB), the Bank of England and the Reserve Bank of Australia will all hold interest rate meetings this week, with the ECB the only one of the group expected to lift its key cash rate.
The wider metals complex tracked gold higher, with silver for September delivery SI1U +1.02% advancing 33 cents, or 1.0%, to $34.03 an ounce.
Silver suffered a near 3% loss last week, but Phillip Futures believe investment demand for the metal is likely to return on a longer-term basis and “could move back towards $45 an ounce.”
“Silver remains attractive as a leveraged play on gold. Silver has a strong positive correlation with gold…should gold rise to a new record high, silver is likely to benefit,” the analysts said.
September copper HG1U -0.01% added 2 cents, or 0.4%, to $4.32 a pound.
Platinum for October delivery PL1V +0.40% added $6.60, or 0.4%, to $1,723.40 an ounce, while the September contract for sister metal palladium PA1U +0.15% gained $2.25, or 0.3%, to $759.70 an ounce.
