Gold staged an impressive rally on Tuesday as fresh global anxiety prompted a sell-off in equities and another round of stimulus speculation.
Bullion for February delivery on the Comex division of the New York Mercantile Exchange closed up $37.10, or 3.1 percent, at $1,232.00 per ounce. Trade ranged from $1,199.50 to $1,239.00.
“Precious metals recovered strongly as a dollar sell off fuelled a strong rally in gold and other precious metals markets,” ANZ Research said. “Gold rebounded on speculation that European and Asian central banks will increase stimulus measures. Investors are increasingly wary that the recovery in the US will offset the slowdown in other major economies.”
In the wider-markets, the dollar was 0.45 percent softer at 1.2372 against the dollar, while US equity markets pared their losses. The Dow Jones industrial average and S&P 500 were last down just 0.41 percent and 0.17 percent.
US stocks, however, performed much better than those in Europe and Asia, where Germany’s DAX and the Shanghai Composite Index closed down 2.21 percent and 5.4 percent respectively.
Meanwhile, the precious metals are starting to diverge from crude oil futures, which remain near five-year lows, Triland Metals noted.
“[Gold is] performing sturdily in the face of currency pressure and deflationary forces,” said Triland Metals, adding that respective breaks of $1,210 and $16.50 in gold and silver led to sharp follow through moves.
As for today’s data, US Jolts job openings for October at 4.83 million beat the forecast 4.81 million and IBD/TIPP economic optimism at 48.4 was higher than the predicted 47.2 but wholesale inventories at 0.4 percent were worse than the expected 0.1 percent.
The NFIB small business optimism index climbed 2.0 points to 98.1 last month, which is just a tick lower than its historical average before the Great Recession and above the 96.6 forecast.
Earlier, the French trade deficit for October was 4.6 billion euros, slightly higher than forecast, while Germany was in surplus by 20.6 billion euros, more than anticipated. Industrial production from the UK was under par, falling 0.1 percent in October – it had been seen rising 0.3 percent.
As for the other precious metals, Comex silver for March delivery ended up 85.8 cents, or 5.3 percent, at $17.134 per ounce. Trade ranged from $16.290 to $17.230.
Platinum futures for January delivery on the Nymex was up $17.40 at $1,246.80 an ounce, while the most-actively traded palladium contract was $811.60 per ounce, up $13.80.
The post Gold price rises on weaker dollar, improved technicals appeared first on The Bullion Desk.
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