Gold climbs to 1-year high as U.S. dollar sees fresh weakness

MarketWatch/Myra P. Saefong & Rachel Koning Beals/09-07-17

Gold climbed Thursday to mark a one-year closing high as the euro strengthened against the dollar in the wake of a European Central Bank meeting, boosting investment demand for the precious metal.

Gold for December delivery rose $11.30, or 0.8%, to settle at $1,350.30 an ounce, following a 0.4% loss it a day earlier. The settlement was highest since Sept. 6, 2016, for a most-active contract, according to FactSet data.

…“Draghi has been reluctant to spell out the month, date and the pace of the tapering process,” said Naeem Aslam, chief market analyst at ThinkMarkets. He “certainly has the ability to punch above his weight and we know that very well. However, the president of the European Central Bank wants to be cautious and avoid a catastrophe.”

Meanwhile, weak U.S. economic data have “pushed the odds for a [U.S. Federal Reserve] rate hike to ground,” said Aslam. “Clearly, the Fed cannot be comfortable with weaker job market and the fact is that worse is still yet to come.”

…The precious metal had rallied to start the holiday-shortened week, getting a lift from nervousness over North Korea’s weekend nuclear display, weakness in the dollar and broad losses in U.S. equities.

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