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Gold Rallies Over Dollar Weakness As Investors Eye $1,238

October 15, 2018 at 16:59 by Andrew Moran

Gold futures are rallying to kick off the trading week as investors eye a key level to finish off the session. The yellow metal rallied on a weaker dollar as well as tumbling global financial markets, prompting traders to find haven in gold.

December gold futures tacked on $8.40, or 0.69%, to $1,230.40 per ounce at 15:45 GMT on Monday. Last week, gold prices recorded a 1.4% weekly gain, lowering their year-to-date losses to 7.4%.

Silver, the sister commodity to gold, is also edging up to start the trading week. December silver futures rose $0.11, or 0.75%, to $14.75 an ounce. The white metal, which lodged a weekly decline of 0.1%, has been climbing over the past month, topping 3%.

The US dollar was slumping on Monday as the greenback shed 0.33% to 95.03. The buck, which has been trending higher for much of 2018, recorded a 0.8% weekly decline last week. A weaker currency is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.

Global financial markets are taking a hit, with Asian and European stocks cratering more than 2% and sliding to multi-month-lows. International stocks were weighed down by the US-China trade spat, stalled Brexit negotiations, the economic slowdown in China, and rising US interest rates – the market appears to have already penciled in a December rate hike by the Federal Reserve.

In this environment, bears are looking to see if gold prices will finish at $1,238, a price that suggests the momentum could be shifting in the precious metal’s direction. It has been well documented that traders have been shorting gold – net-short positions jumped 41% to a new record just before gold’s rally.

In other metals markets, December copper futures rose $0.005, or 0.2%, to $2.80 per pound. December platinum futures edged up $5.40, or 0.64%, to $845.60 an ounce. December palladium futures surged $17.00, or 1.67%, to $1,077.80 per ounce.

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