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Gold Posts Narrow Gains on US Political Turmoil, Lower Greenback

October 30, 2017 at 16:49 by Andrew Moran

Gold futures are posting modest gains on the start of the trading week as domestic political turmoil has hurt the US dollar. The yellow metal is looking to take advantage of investors’ concerns, especially as gold prices have endured six weekly declines in the past seven.

December gold futures rose $5.60, or 0.44%, to $1,277.40 per ounce 16:30 GMT on Monday. Gold prices have been trading at three-month lows and reported a 0.6% weekly decline last week.

Silver, the sister commodity to gold, is also rallying at beginning of the trading week. December silver futures jumped $0.06, or 0.41%, to $16.82 an ounce. The white metal is looking to build some momentum after last week’s 1.6% weekly decline.

Gold is benefiting from a weaker US dollar as the greenback shed 0.43% on Monday. The greenback has been strengthening in recent weeks on positive economic data, President Donald Trump inching closer to achieving tax reform, rising interest rates, and calmer geopolitical tensions. A lower US dollar is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

The US currency has taken a hit on leaked reports that ex-Trump campaign manager Paul Manafort has been indicted on money laundering and tax evasion charges. This is the first arrest in special counsel Robert Mueller’s investigation into allegations of Russian meddling in the 2016 election.

Experts say that further developments that may hinder the president’s pro-business agenda or even his administration would be a boon for gold.

Meanwhile, traders are still determining who the president is likely to pick as his nominee to leader the Federal Reserve. Some reports say that President Trump is going to tap Fed Governor Jerome Powell, while other reports say he may renominate Chair Janet Yellen to the post. Trump is scheduled to announce his nominee on Friday.

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