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Gold Gains at Start of Week as US Dollar Weakens Ahead of Fed

December 17, 2018 at 15:56 by Vladimir Vyun

Futures for gold rallied on Monday. Other metals were mixed, with silver and palladium logging gains, while platinum and copper posted losses. The likely reason for such behavior was the fall of US and European stocks, which added to the risk aversion sentiment on markets. Another reason for the gains of bullion was the weakness of the US dollar, which made commodities priced in the greenback cheaper to buy. The US currency weakened due to uncertainty about Federal Reserve’s plans for monetary policy in the next year.

The rally was limited, though, as markets were counting on an interest rate hike from Fed on Wednesday. Higher interest makes it less attractive for investors to hold assets, which do not bear yield by themselves. Furthermore, despite the uncertainty about Fed’s policy going forward, the outlook for the US dollar was generally bullish.

Contract for delivery of gold in February added 0.31% to its value to trade at $1,245.3 per troy ounce as of 15:38 GMT on COMEX today. March silver advanced 0.16% to $14.66 per ounce. Spot price for palladium jumped as much as 1.61% to $1,263.25 per ounce. At the same time, platinum subtracted 0.19% to $785.51 per ounce. Copper for delivery in March dropped as much as 1.16% to $2.7305 per pound.

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