Gold rose more than 1 percent on Monday, extending gains as geopolitical risks drove investors to safe-haven assets after the metal's third-straight weekly decline. The US dollar dropped against a basket of currencies, also boosting gold. Spot gold was up 1 percent at $1,281.46 an ounce by 1:58 p.m. EST (1858 GMT), while US gold futures for December delivery settled up $12.40, or 1 percent, at $1,281.60 per ounce.
"Geopolitical issues in Saudi Arabia over the weekend and into today drove the price of gold up," said David Meager, director of metals trading at High Ridge Futures in Chicago, citing investors who bought into gold as a safe haven. Saudi Arabia's future king, Crown Prince Mohammed bin Salman, tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including billionaire Alwaleed bin Talal who is one of the kingdom's most prominent businessmen.
Gold has drifted lower over recent weeks, pulling back 2.5 percent from its mid-October peak as expectations for a Fed interest rate increase were shored up by upbeat US data. Bullion is highly sensitive to rising US rates, as these increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
Hedge funds and money managers reduced their net long position in COMEX gold contracts for the seventh straight week, in the week to Oct. 31, US Commodity Futures Trading Commission (CFTC) data showed on Friday. Speculators withdrawing from gold likely drove the gold-silver ratio to 74.14, its lowest since early June, said Jeffrey Christian, managing partner of CPM Group in New York.
The gold-silver ratio shows the amount of silver ounces it takes to purchase one ounce of gold. Among other precious metals, silver up 2.4 percent at $17.20 an ounce, platinum up 1.4 percent at $931.75, and palladium was up 0.2 percent at $998.50 an ounce.
Comments
Comments are closed.