Amrith Ramkumar and
Gold prices inched higher Thursday, boosted for much of the session by a weaker dollar.
Gold for December delivery closed up less than 0.1% at $1,278.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices have traded roughly sideways in November and sit about 5.5% off their year-to-date highs from early September, weighed down by a stronger dollar and interest-rate concerns.
“This range has definitely not been a trader’s market. It’s been one of the tightest ranges I can remember,” said Chris Gaffney, president of EverBank World Markets.
Gold bullion bars sit following casting at the Rand Refinery plant in Germiston, South Africa.Photo: Waldo Swiegers/Bloomberg News
A stronger dollar makes gold and other dollar-denominated commodities more expensive for foreign investors. The WSJ Dollar Index—which tracks the U.S. currency against a basket of 16 others—was recently up less than 0.1%, rising after the House of Representatives passed a tax bill. The dollar’s rise late in the session dragged gold down from its Thursday highs.
Many investors and analysts have said they expect rangebound trading to continue for gold leading up to the Federal Reserve’s December meeting. Gold struggles to compete with yield-bearing assets like Treasurys as borrowing costs rise.
Although the market already expects the Fed to raise rates in December, some analysts have said the central bank’s outlook moving forward based on inflation readings at the end of the year could swing gold prices.
“Unless we get a surprise on the Fed meeting or a geopolitical shock… I don’t think you’re going to see much movement going into year-end,” Mr. Gaffney said.
Many investors tend to favor gold and other haven assets during times of geopolitical uncertainty, believing they will hold their value better if markets turn rocky. Some analysts have also said a pullback in equities could fuel a rally in gold prices.
Among base metals, copper for December delivery swung between small gains and losses and closed down 0.2% at $3.0480 a pound in its fifth day of declines in the last six sessions. The industrial metal sits roughly 6% off its three-year highs from late October, with weak economic data out of China leading to a pause in this year’s rally in copper and other base metals. China accounts for roughly half the world’s copper consumption.
Write to Amrith Ramkumar at firstname.lastname@example.org and Christopher Alessi at email@example.com