MW:Gold gains on fiscal-cliff hopes, weaker dollar
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Gold futures extended week-to-date gains Tuesday, returning above $1,700 an ounce, amid renewed optimism for progress on U.S. budget talks and a slightly weaker dollar.
Gold for February delivery GCG3 +0.26% rose $5.50 to $1,703.70 an ounce. The precious metal had gained $1.20, or 0.1%, to $1,698.20 an ounce in New York on Monday.
Tuesday’s gains came after reports that U.S. President Barack Obama made a new offer to avert the U.S. fiscal cliff of looming tax hikes and severe spending cuts, moving closer to the Republicans’ position. Read: Obama reportedly makes new 'fiscal cliff' offer
The White House’s latest counterproposal includes $1.2 trillion in revenue increases and $1.22 trillion in spending reductions, Reuters reported.
Meanwhile, the dollar index DXY +0.02% , which measures the greenback against a basket of six rivals, slipped to 79.533, down from 79.557 in late North American trading on Monday. Read: Dollar jumps to 19-month high vs. yen
A higher dollar makes commodities priced in dollars, including gold, less attractive to holders of other currencies.
While negotiations over the U.S. fiscal cliff continue, “the outlook [for gold] remains uncertain,” said commodity strategists at Deutsche Bank.
“Once clear, we would expect that gold could move higher, likely towards the upper band of its recent range, $1,750 an ounce,” the strategists said.
Around the wider metals complex, silver for March delivery SIH3 +0.73% rose 22 cents to $32.50 an ounce.
March palladium PAH3 +0.22% climbed $5.10 to $703.40 an ounce, while January platinum PLF3 +0.45% rose $7.80 to $1,616.30 an ounce.
Copper for March delivery HGH3 +0.15% climbed 2 cents to $3.69 a pound.
Sarah Turner is MarketWatch's bureau chief in Sydney. Follow her on Twitter @SarahTurnerMKTW.
