NEW YORK, Nov 28 — Gold futures climbed above US$1,300 (RM5,344) an ounce for the first time in six weeks as the US dollar wavered and investors braced for an onslaught of economic data and political news.
Bullion rose for the third time in four days as a gauge of the US dollar traded close to the lowest since September. A report later this week is forecast to show the Fed’s preferred gauge of inflation slowed in October, after Chair Janet Yellen cautioned last week that raising rates too quickly risks stranding inflation below the central bank’s target.
Bullion is up almost 13 per cent since Dec 31, on course for the best year since 2010, as geopolitical uncertainty underpins demand for the metal as a haven and divisions among US central bankers persist over the path of rate policy.
Low rates boost the appeal of non-interest-bearing assets such as gold. Meeting minutes published last week showed several Fed policy makers were concerned about low expectations for consumer-price gains.
“A weaker dollar underpinned gold and traders are covering shorts,” George Gero, a New York-based managing director at RBC Wealth Management, said in an email. Asset allocators “are closely watching” the US$1,300 level, he wrote.
Bullion futures for February delivery climbed 0.5 per cent to settle at US$1,298.90 an ounce at 1.33pm on the Comex in New York. A most-active contract hasn’t traded above US$1,300 since Oct 16.
Gold prices should continue to head higher, averaging US$1,300 in 2018, BMI Research said in a report. Futures have averaged about US$1,260 this year.
“This week has a particular importance for investors due to a number of key events unfolding which includes the OPEC meeting, Bank of England performing a stress test, the Federal Reserve coming in the spotlight and of course the US tax reform,” Naeem Aslam, chief market analyst at Think Markets UK Ltd in London, said in an email.
The US Senate tax bill is headed for a marathon debate this week with the aim to hold a floor vote as early as Thursday. US economic data expected this week includes gross domestic product, consumer prices and personal spending and income.
Jerome Powell, President Donald Trump’s pick to lead the Fed, faces a confirmation hearing today, while Yellen and New York Fed President William Dudley are among policy makers speaking this week. — Bloomberg
