Gold Inches Up as Dollar Weakens Silver, platinum and palladium also rose

Release Date:  Friday, January 25, 2019


The Wall Street Journal 

1/25/2019 

David Hodari and Amrith Ramkumar



Gold prices ticked up Friday, supported by a falling dollar.

Gold for February delivery climbed 0.9% to $1,291.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices have stayed between about $1,275 and $1,295 this month, largely swinging based on moves in the U.S. currency.

A weaker dollar makes gold cheaper for overseas buyers. On Friday, the WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, fell 0.3%.

After choppy markets boosted haven demand for gold in the fourth quarter, spurring a price rebound after bullion fell earlier in 2018, some analysts are also weighing whether the stock market’s January rebound might keep a lid on gold prices moving forward.

Some investors expect the metal to eventually break out of its current range if markets turn volatile again. More signs of caution from the Federal Reserve regarding its pace of interest-rate increases and pace of its balance sheet runoff could also boost gold, which struggles to compete with yield-bearing assets as rates rise.

“We expect gold’s role as a portfolio diversifier and hedge should increasingly become attractive against the backdrop of uncertainty about growth and monetary policy,” said Joni Teves, a strategist at UBS , in a note.

Still, signals from the Fed that it will be patient with further rate increases have reinforced confidence in the U.S. economy, potentially hurting the short-term outlook for gold, some analysts say.

Elsewhere in precious metals, most-active silver futures surged 1.8% to $15.575 a troy ounce. Platinum added 1.5% to $817, while palladium climbed 1.4% to $1,298.20.

Among base metals, most-active Comex copper futures for March delivery rose 1.9% to $2.6950 a pound, supported by fresh signs of stimulus from the People’s Bank of China. Fears about a growth slowdown in China, the world’s largest industrial metals consumer, have hurt copper and other materials in recent months.

On the London Metal Exchange, aluminum for delivery in three months edged up 0.3% to $1,896.50 a metric ton. Zinc added 0.4% to $2,651, tin fell 1.2% to $20,680, nickel climbed 0.8% to $11,860 and lead rose 1.2% to $2,099.

 

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