The gold price surged back above the key psychological $1,200 level on Monday, with a weaker dollar and news of a reshuffling in Greece’s negotiating team providing upward impetus.
Spot gold was last at $1,202.20/1,203 per ounce, up $22.60 on Friday’s close – it bottomed out at $1,178.70 earlier, close to its lowest in a month. Silver followed gold higher – it was last up 69 cents at $16.38/16.43, a one-week high.
The main factor in the stronger tone was a gradual decline in the dollar to intraday lows of 1.0907 against the euro. As well, the dollar index was last at 96.63, a three-week low.
The move was exacerbated by forecast-missing data – the US flash services PMI missed consensus at 57.8, though the number still suggests a sustained upturn in US service sector output. But it follows poor durable goods orders data on Friday at -0.2 percent.
Stock markets all performed strongly on Monday, with the Dow so far up 0.3 percent and S&P 500 up 0.11 percent. In Europe, markets benefitted from news of the restructuring in Greece’s negotiating team.
Greece could default on its debts unless a deal can be brokered with its creditors. Talks continue this week; eurozone finance ministers at a summit in Riga last week lambasted Greek counterpart Yanis Varoufakis for a lack of progress in critical reforms needed to secure funding.
Market participants will now closely watch Wednesday’s FOMC statement. While higher interest rates are not yet expected, the developing inflationary environment may well prompt comments from Fed chair Janet Yellen.
Inflation and slack in the labour market are the two factors that will guide the Fed’s hand in normalising monetary policy.
The PGMs followed higher – platinum was last up $31 at $1,148/1,153 per ounce while palladium was up $14 at $782/787.
(Editing by Mark Shaw)
The post Gold price surges on dollar retreat appeared first on The Bullion Desk.
No comments:
Post a Comment