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Gold Prices Inch Higher on Weaker Dollar and Thin Trading Volumes

Strategic Insights

— 1 min read

Gold prices inched higher on the Comex division of the New York Mercantile Exchange on Monday, driven by a weaker dollar and thin pre-holiday trading volumes. The most actively traded contract, for February delivery, was recently up 0.2%, or $3.30, at $1,383.80 per troy ounce. The December-delivery contract was up 0.3%, or $3.40, at $1,383.40 per troy ounce. Market analysts attributed the gold price movement to the weakening dollar, which makes dollar-denominated contracts like gold futures appear cheaper to foreign buyers.

Key Takeaways:

  • Gold prices inched higher on the Comex division of the New York Mercantile Exchange, driven by a weaker dollar and thin pre-holiday trading volumes.
  • The most actively traded contract, for February delivery, was recently up 0.2%, or $3.30, at $1,383.80 per troy ounce.
  • The December-delivery contract was up 0.3%, or $3.40, at $1,383.40 per troy ounce.
  • Market analysts attributed the gold price movement to the weakening dollar, which makes dollar-denominated contracts like gold futures appear cheaper to foreign buyers.
  • Thin trading volumes, with less than 1,000 contracts changed hands at 9:40 a.m. on Monday, contributed to the price movement.
  • A snow storm in the Northeast United States and holiday closures in the U.K. affected trading and contributed to thin volumes.
  • Charles Nedoss, senior market strategist with Olympus Futures, stated that the dollar is at the top end of its trading range and will support gold as it weakens.

Statistics:

  • Gold prices were up 0.2% to 0.3% at $3.30 to $3.40 per troy ounce.
  • Total contracts traded were less than 1,000 at 9:40 a.m. on Monday.
  • The euro was recently at $1.3151, up from $1.3117 late Thursday.
  • Interest rate hike in China had a minimal negative impact on gold prices.

Sources:

  • Dow Jones Commodities News
  • Comtex
  • Charles Nedoss, senior market strategist with Olympus Futures
  • Tatyana Shumsky, Dow Jones Newswires
  • Dow Jones Newswires (C) 2010 Dow Jones & Company, Inc.

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