Gold prices rose on Monday after making their first weekly advance in seven. The US dollar did not recover from a sharp decline last week.
The precious metal and the US currency continued their inverse relationship on Monday with December gold
GCZ8, + 0.16%
by $ 2.70 or 0.2%, at $ 1.216 per ounce as a leading dollar index
fell 0.3% to 94,828. Gold is often traded higher as the dollar weakens, and vice versa, because the precious metal is traded in the greenback.
Friday's gold added $ 1
The ICE US Dollar Index, the popular indexed measure of the dollar against six competitors, fell 1% last week, the largest weekly slump since February. It still stood at 0.3% in August as rising interest rates increase the opportunity cost of holding non-yielding gold while boosting the dollar in which gold is trading.
Federal Reserve Chairman Jerome Powell said at the annual FED symposium in Jackson Hole, Wyoming, that the gradual rate hikes in the US remain reasonable and there is no risk of overheating the economy. He also said he was ready to do anything "if inflation goes up or down" or if the crisis should threaten again.
Read : Why gold has done so poorly despite stocks Markets are volatile
And: How to know if stocks would really crash if Trump were to be charged [19659002Gold'sreboundover$1200is"adirectresultofFedGovernorPowell'swordsofagradualratehikefor2019raisingexpectationsofaslowdowninUSmonetarypolicy"saidCarloDeCasaBritishchiefanalystOnlinebrokersActivTradesviae-mail
One of the biggest unknowns for the economy is trade and customs. The Wall Street Journal reported that the US and Mexico were close to reaching agreement on key issues, delaying a renegotiation of the North American Free Trade Agreement.
Analysts have observed the ability of gold to hold the $ 1,200 line after the market declined sharply due to short positions or bets that the price of an asset has fallen.
"The fact that the market participants before were very pessimistic Gold should also have contributed to the price increase [last week]," said analysts of the Commerzbank under the direction of Carsten Fritsch in a note. Commodity Futures Trading Commission statistics showed that net short positions widened to 90,000 contracts during the week ended August 21.
"As in the weeks before, it was mainly a question of short positions, while the long positions remained virtually unchanged and some of the short positions may have been covered late last week, especially after the price hit 1.200 $ had exceeded, "the analysts said.
On the demand side, analysts are watching India. The All Kerala Gold & Silver Merchants Association in Kerala, the country's largest gold buyer, expects gold demand to plummet by half in September due to flood damage, the Commerzbank team said.
Under exchange-traded funds SPDR Gold shares
GLD, + 0.28%
added 0.4% after rising nearly 2% last week. The VanEck vectors Gold Miners ETF
GDX, + 1.35%
was 1.6% higher.
SIU8, + 0.28%
rose 4.1 cents, or 0.3%, to $ 14.835 an ounce. The contract climbed 1.7% on Friday, rising 1.1% last week.
High quality copper for delivery in September
HGU8, + 0.37%
had risen 0.5% at $ 2,713 an ounce, while in October there was platinum
PLV8, + 1.84%
were stapled to 1.9%, to $ 804.2040 per ounce, and to palladium in September
PAU8, + 1.64%
added 1.6% to $ 943.80 an ounce.
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