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Gold Surges to Four-Month High on Sinking US Dollar

January 15, 2018 at 16:51 by Andrew Moran

Gold futures are trading at their best levels in about four months, thanks to a sliding US dollar and a closed US stock market. Silver is also putting together a more than 1% rally on Martin Luther King Jr. day.

February gold futures rose $6.70, or 0.50%, to $1,341.60 per ounce at 15:36 GMT on Monday. Gold prices are on track to settle at their highest levels since September, which follows last week’s 1% weekly gain.

Silver, the sister commodity to gold, is surging well above $0.17 on Monday. March silver futures $0.23, or 1.35%, to $17.37 an ounce. The white metal recorded a weekly loss of 1% last week.

Precious metals are benefiting from a tanking US dollar as the greenback shed 0.6%. The US dollar is trading at lowest levels in about three years, which is a boon for dollar-denominated commodities. A weaker greenback makes commodities like gold and silver cheaper for foreign investors to purchase.

The US dollar is slipping on reports that the Federal Reserve may be taking a slower approach to normalizing interest rates. Despite the Fed and other central banks raising rates – the US central bank has pulled the trigger on five rate hikes in two years – the sluggish pace is impacting the greenback.

Gold is also benefiting from a closed US stock market.

Last week, the US government reported that the core rate of consumer inflation, excluding energy and food, soared 0.3% in December as the 12-month inflate rate dipped to 2.1%. Analysts warned that the Fed may adopt a slower plan to raising rates in 2018 and potential 2019.

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