Gold futures prices retreated from the highest level in nearly 3-week on Monday as the U.S. dollar and global equity marketplaces rebounded from a brutal selloff in the prior session by the Fed’s comments last week to keep US interest rates on hold.
On the Comex Gold for December delivery hit an Intraday peak of $1,139.40 a troy ounce before turning lower to trade at $1,131.60. Spot gold was down 0.5 percent at $1,133.30 an ounce.
The US dollar pushed higher against all major currencies on Monday, as the dollar continued to recover from the Fed’s decision last weekend to keep interest rates at present levels.
The dollar index, which measures the strength of the greenback versus a trade-weighted basket of six major currencies, rose 0.4% to 95.75 early Monday.
Gold increased substantially after the Fed shrank up on Thursday, reaching a high of $ 1141.50 the next day, but now it has withdrawn below that level.
With still expect the Fed to raise rates before the end of the year, gold may be under pressure again.
Meanwhile, global equity markets climbed together with other risk sensitive assets, such as oil and copper, recovering from heavy losses on Friday.
European stocks climbed 0.6 percent on Monday. The S&P BSE 500 Index ends flat; but most stocks advanced, led by lenders and industrials, amid speculation that the Federal Reserve’s decision to maintain its benchmark interest rates will pave the way for the nation’s central bank to cut borrowing costs next week.
Gold prices in the international market has fallen. In the domestic market, weak rupee is supporting gold prices. MCX gold is trading around 0.25 per cent gains to Rs 26,540.
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