Gold futures rose Monday, on track a third consecutive win by starting the week with support from a decline in the U.S. dollar.
Gold for August delivery climbed $25.70, or 2%, to $1,318.90 an ounce in electronic trade.
Dollar-denominated gold prices advanced as the U.S. dollar fell against key rivals, driving the ICE dollar index lower.
Commodities including gold that are priced in dollars can benefit when the greenback declines, as the resources become less expensive to buy for holders of other currencies.
Gold prices on Friday ended up 0.7% to $1,292.90 an ounce on the Comex division of the New York Mercantile Exchange, the highest settlement for a most-active contract since June 19, according to FactSet data.
Gold prices finished last week higher by 1.2%, gaining in part after U.S. Federal Reserve Chairman Ben Bernanke said in congressional testimony that the central bank had no set timetable for slowing its monetary stimulus. The stimulus measures, known as quantitative easing, have been considered supportive for gold prices.
Data from the Commodity Futures Trading Commission for the week ended July 16 showed a decline in gold gross speculative short positions from an all-time high in the previous week.
“Further short covering for gold may provide a near-term boost for prices,” said HSBC analyst James Steel to clients on Friday.
Bernanke has indicated that the Fed will keep interest rates low for the foreseeable future, but “tapering of quantitative easing seems to be a strong possibility in the next two to three quarters,” IIFL analysts wrote Friday.
IIFL said that gold prices have formed “lower highs during the course of the past three months, which denote that the overall trajectory remains on the downside.”
Meanwhile, September silver rose 47 cents, or 2.4%, to $19.93 an ounce. Prices last week fell 1.7%.
September copper gained 3 cents, or 0.9%, to $3.17 a pound. October platinum picked up $6.80, or 0.5%, to $1,438.00 an ounce, adding to last week’s rise of 1.7%.
September palladium advanced 75 cents, or 0.1%, to trade at $750.50 an ounce, building on last week’s increase of 3.7%.
Source : Marketwatch
