Last month, the dollar index surged to a 10-week high at 97.89 amid hawkish comments from the Federal Reserve on the increasing likelihood of an interest-rate hike before the end of the year.
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Silver is up against a near-term juncture: this 1530 zone.
“The economy is growing and does not need zero interest rates, but with inflation low and the economy growing at a slower pace than earlier in the year combined with global headwinds, I doubt the Fed will be willing to pull the trigger”, said Mary Ann Hurley, vice president of trading in Seattle at D.A. Davidson & Co.
“If we get 175,000 or 180,000 (new jobs) and wages up three tenths of a percent, that significantly increases the probability that the Fed will raise rates in December”, said Mickey Levy, an analyst at Berenberg in New York. “That should see the gold price falling”. Traders believe that the geo-political tensions in the Middle East would continue to provide support to the precious metal in the coming month.
The most active gold contract for December delivery fell 5.5 USA dollars, or 0.48 percent, to settle at 1,135.90 dollars per ounce. That said, the USA futures market only increased the odds of a Fed rate rise in December from 35% to 50%, so it will take more positive economic data between now and then before a December rate rise becomes the market’s base-case scenario. “We would therefore not be surprised by a sharp fall in the net spec length in the forthcoming CFTC statistics due on Friday”.
“The expectations of that Federal Reserve rate hike are going back and back”. “U.S. data will be in focus this week, after the Fed signaled they may hike rates in December”.
Specifically the prices of Gold and Oil have fluctuated extensively with Oil settling on a range of about $43 to $50 per barrel, while the price of gold has oscillated between $1,110 and $1,190 over the last two months. “That seems the most obvious explanation for the correction in the gold price”.
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In other metals, December copper finished essentially flat at $2.319 a pound, while January platinum closed with a loss of $10.70, or 1.1%, at $978.40.
