The spot gold price remained supported during Asian trading hours on Monday December 19 after the US dollar softened.
The spot gold price was recently quoted at $1,138.00/1,138.30 per oz, up $2.90 on the previous close. Trade has ranged from $1,137.95 to $1,138.70 so far.
The price had rebounded from as low as $1,122.90 on December 15 after the US dollar index reached as high as 103.56 on the same day.
The US dollar index has softened to 102.75 so far on Monday, down 0.04% from last Friday’s close, following weaker than expected US data last Friday.
US building permits issued in November stood at 1.2 million, below the forecast of 1.24 million, while housing starts in the same month came in at 1.09 million, below the consensus of 1.23 million.
“US property data last Friday did not meet expectations and this caused downward pressure on the US dollar index,” China’s Zhengjin Precious Metals said on Monday morning.
“We are cautiously optimistic on the gold price in the near-term,” the broker said. It sees short-term support at $1,130 per oz and resistance at $1,160.
Gold prices have stabilised as the strength in the US dollar abated, ANZ Research said on Monday morning.
“The precious metal has been under siege since last week’s Fed rate [increase]. It now appears to have found a base, however upside will be limited as investors look to other markets for yield,” the bank said.
The US Federal Reserve had raised the federal funds rate by 25 basis points to 0.5%-0.75% last week – the increase is a first since December 2015 – while also suggesting three rate increases in 2017 compared with two previously.
Source: The Bullion Desk