PT Equityworld-Gold prices rose in late trading Tuesday morning (29/11), recovering from its lowest level since February after the US dollar and US Treasury bond yields Treasury retreated from recent highs.
Spot gold prices rose 0.82 percent to $ 1,192.36 an ounce after rising as high as $ 1,197.54 earlier in the session. Precious metals in the previous session fell the lowest since February 8 at $ 1,171.21 per ounce under pressure from 14-year highs in US dollars.
US gold futures for December delivery ended at $ 1,190.80 per ounce.
The precious metal has fallen 7 percent so far this month as the dollar and the results of high-backed bonds benefit from an enlarged fiscal spending by US President-elect Donald Trump.
Gold does not pay interest, the hike back of US bonds and other markets is seen as negative for the precious metals.
The US dollar index, which measures the greenback against a basket of currencies, fell 0.4 percent on Monday, while the yield on 10-year US Treasury retreated from 16-month highs reached 2.417 percent last week.
In other markets, crude oil prices were slightly lower as doubts OPEC can reach agreement to limit supply and major European stock markets also fell.
“If oil prices fall or remain low then inflation will not rise high and there will be less incentive to raise US interest rates soon and the dollar will not be strong, which should be supportive for gold,” head of commodity strategy at ING Hamza Khan stated as reported by CNBC.
Federal Reserve policy makers appear to be confident on the eve of presidential elections that strengthening the economy enough to warrant a rate hike, according to the minutes of the meeting showed the Fed’s early November.
Traders also said the supply concerns in China after the landing of the People’s Bank of China to restrict gold imports, continued to give a premium in Shanghai around $ 22, driven by rising demand.
Premiums gold in top consumer China surged to its highest level in almost three years last week on supply concerns.
Demand from Southeast Asia are also quite good and buy at lower prices could push prices higher, said Cameron Alexander, an analyst at Thomson Reuters-owned metals consultancy GFMS, told CNBC.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.73 percent to 885.04 tonnes on Friday.
Among other precious metals, silver was up nearly 1 percent to $ 16.68 per ounce and palladium rose 1.2 percent to $ 749.80. Platinum rose 1.5 percent at $ 918.
PT Equityworld Analyst Research Center estimates that the price of gold at the next trade has the potential to move up with the weakening US dollar. But if sentiment strengthened expectations of US rate hike happening again, would depress prices. Prices are expected to move in the range of $ 1,194- $ 1.196 Resistance, whereas if the price drops will move in the range of $ 1,190- $ 1.188 Support.