MW: Gold futures rise, bouncing back after largest single-day drop in 2 weeks
Gold futures were inching higher in Tuesday trading, a day after the precious metal suffered its worst single-day fall in more than two weeks.
December gold GCZ5, +0.11% was $3.50, or 0.3%, higher at $1,176.30 an ounce. The yellow metal is hovering near its 200-day moving average of about $1,176 an ounce and has enjoyed a relatively long period of gains on the back of fading worries that the Federal Reserve will lift interest rates in 2016. Stubbornly low inflation, so far, has made some U.S. central bankers reluctant to raise interest rates for the first time in nearly a decade.
But the metal has been down for two consecutive trading sessions since Friday, with traders attributing some of the recent decline to investors consolidating gains.
Read: Gold’s rallying—but should investors still be wary?
“After jumping around $90 since the beginning of the month to trade at a near four-month high above $1,190, gold has slipped to trade towards $1170 as traders take profit on the metal,” said Jameel Ahmad, chief market analyst at FXTM. Gold has gained about 5.4% in October, according to FactSet.
Ahmad noted that optimism for gold to climb remains high as the prospect of a Fed rate increase recedes.
“Although gold has made strong gains throughout October, I still think that the metal has potential to continue trading higher before the end of the year. U.S. interest rate expectations for 2015 are not only diminishing as each trading week passes, but also being pushed further back into 2016 with this providing encouragement for investors in gold,” he said.
Meanwhile, December silver SIZ5, +0.12% gained 5 cents, or 0.3%, to $15.89 an ounce.
On Tuesday, dollar-denominated metals were getting a lift from a weaker buck, which was slipping. The ICE U.S. Dollar Index DXY, -0.23% a measure of the greenback against a basket of six rival currencies, was 0.3% lower Tuesday. A weaker dollar makes commodities in that currency more attractive to purchasers using other monetary units.
In other metals, December copper HGZ5, -0.23% slipped a penny, or 0.3%, to trade at $2.360 a pound.
January platinum PLF6, +0.17% ticked 60 cents, or less than 0.1%, higher at $1,015 an ounce, while December palladium PAZ5, +0.25% retreated $1 dollar, or 0.2%, to $687.10 an ounce.
