Gold Futures Rebound, But Settle Lower on Dollar's Strength

Strategic Insights -

Gold futures rose from a low near $1,000 on Monday, with the most-active contract settling at $1,004.90 an ounce as the US dollar eased from intraday highs. However, the metal remained lower on the day as participants took profits in the yellow metal, said Michael Gross, broker and futures analyst with OptionSellers.com. The dollar's strength and declines in the equities market prompted some to book profits in gold.

Key Takeaways:

  • Gold futures rebounded from a low near $1,000 on Monday, but settled lower on the day due to the dollar's strength.
  • The most-active December gold contract fell $5.40 to settle at $1,004.90 an ounce on the Comex division of the New York Mercantile Exchange.
  • Sterling Smith, market analyst with Country Hedging, noted that gold is often bought and sold inversely with the dollar, as it is considered a dollar hedge and alternative currency.
  • Barclays Capital stated that external drivers, including dollar movements, are likely to set the tone for trading in gold over forthcoming sessions, and prices could face downward pressure if the dollar continues to strengthen.
  • Silver futures traded similarly to gold, with Comex December silver losing 18.5 cents to settle at $16.880 an ounce.
  • Platinum and palladium futures ended lower despite some bargain hunting, with Nymex October platinum falling $16 to settle at $1,322.20 an ounce and December palladium slipping $5.35 to settle at $299.15 an ounce.

Statistics:

  • December gold fell $5.40 to settle at $1,004.90 an ounce.
  • Comex December silver lost 18.5 cents to settle at $16.880 an ounce.
  • Nymex October platinum lost $16 to settle at $1,322.20 an ounce.
  • December palladium slipped $5.35 to settle at $299.15 an ounce.
  • The ICE Futures U.S. dollar index was up 0.237 point, while the Dow Jones Industrial Average was down 41.04 points.

Sources:

  • Michael Gross, broker and futures analyst with OptionSellers.com
  • Sterling Smith, market analyst with Country Hedging
  • Barclays Capital
  • Matt Whittaker, Dow Jones Newswires

Dow Jones Newswires, 21 Sep 2009.