News

Dec 28, 2017

Gold Continues to Rise, Touches One Month High on Weaker Dollar, Renewed Buying by Jewellers

Gold prices continued to rise for the ninth consecutive day, reachng a one-month high of US$ 1,292.69 per ounce in intra-day trading on different global exchanges. The rally has largely been driven by a relative weakening of the dollar, which also touched its own four week low.

The price rally has also been supported by renewed buying by jewellers at the earlier lower levels, when the yellow metal dipped to an over four month low near the US$ 1235 level.

The decline in the dollar reflected the prevalent uncertainty among investors as a result of some recently released economic data and the implications of policy changes including the recent US government tax reform measures.

During the last few weeks, pending home sales in US rose by a somewhat marginal 0.2% month-on-month, as against an expected decline of 0.4%, while the consumer confidence gauge issued by the Conference Board also dropped to 122.1 in December, well below the 128 that had been forecast.

Similarly, US 10-year bond yields are down, while the personal consumption expenditures price index, which excludes food and energy, rose by a mere 0.1% last month. This index is often used as an indicator of inflation.

With the US Federal Reserve not announcing any change in the outlook for 2018, investors are also expecting that there will be at least three rate increases in the year.