Gold Up 1% as Dollar Softens

The most actively traded gold futures contract, for December delivery, was recently up $7.40, or 0.7%, at $1,074.20 a troy ounce on the Comex division of the NY Mercantile Exchange.

Oil prices jumped and government debt prices also rose on Tuesday after Turkish jets shot down a Russian warplane near the Syrian border, adding to worries about tensions in the Middle East.

“The heightened geopolitical threat from the downing of a Russian jet by a North Atlantic Treaty Organisation member country while Brussels remains in lockdown is sending people into safe havens like the yen and gold and out of travel-sensitive stocks”, said Jasper Lawler, market analyst at CMC Markets, in a note.

Upbeat US gross domestic product numbers, which supported the view the U.S. Federal Reserve could raise interest rates next month, limited the bond market’s gains.

Gold slid to its lowest since February 2010 last week at $1,064.95 an ounce, and pressed back to within a few dollars of that level on Monday as the US unit hit an eight-month high against a currency basket. If the dollar continues to grow stronger, gold will soften as a result.

Gold touched a five-year low last week as traders increased wagers that US policy makers will raise borrowing costs, with the chances of a move next month seen at 72 percent, data compiled by Bloomberg show. USA gold was unchanged on the day after a near 1 percent gain in the previous session. Its 9 percent drop this year has come largely on the back of rate hike speculation.

“The recent strength in the US job market and inflation data have further mounted the case that the USA economy is sufficiently resilient to withstand a rate hike”, Vyanne Lai, an economist at National Australia Bank Ltd.in Melbourne, said by e-mail.

The Dow Jones industrial average rose 19.51 points, or 0.11 percent, to 17,812.19, the S&P 500 gained 2.55 points, or 0.12 percent, to 2,089.14 and the Nasdaq Composite added 0.33 points, or 0.01 percent, to 5,102.81.

The platinum market deficit will shrink this year, before moving into a small surplus in 2016 as supply from mining and recycling rises and investment falls, the World Platinum Investment Council said in a report.

This story has not been edited by Firstpost staff and is generated by auto-feed.