Gold up 2nd Week in Row Despite Bedeviling by Dollar

Commodities & Futures
© Reuters. © Reuters.

By Barani Krishnan

Investing.com – Gold ended up for a second straight week, benefitting from Friday’s dip in the dollar which has boxed the yellow metal in a range after the record highs of August.

settled up $ 12.20, or 0.6%, at $ 1,949.90 per ounce. The week’s gain was just $ 2, though enough to put it in positive territory.

, which reflects real-time trades in bullion, was up $ 10.74, or 0.6%, at $ 1,954.67 by 2:28 PM ET (14:28 GMT), recouping all of Thursday’s decline. For the week, bullion showed a gain of 0.7%.

“If XAU/USD breaks $ 1,974 then the (up)trend could be back on,” gold chartist Rajan Dhall said in a blog on FX Street, using the trading symbol for bullion.

Gold bulls have been trying to revive momentum in the yellow metal since the market’s slump from August record highs of nearly $ 2,090 an ounce on COMEX and $ 2,073 on bullion.

But they’ve been hamstrung by the strength in the Dollar Index, which has largely retained the key bullish handle of 93 points despite monetary dovish policy from the Federal Reserve. 

In its September policy statement issued Wednesday, the Fed said it expected to increase in coming months its holdings of Treasury securities and agency mortgage-backed securities, “at least at the current pace, to sustain smooth market functioning and help foster accommodative financial conditions.” 

Yet, the dollar rose after that announcement, hitting a one-week of 93.63 on Thursday, although it fell back to under 92.78 on Friday.  

Dhall said in his blog that he expected a choppy week ahead for bullion, which could still turn out to be positive.

“The interesting thing about the price action is the fact that there (are) both lower highs and higher lows,” he said, adding that the main consolidation low stood at $ 1,915.50. “There is no point analyzing the indicators as they are both in the mid-zone. Overall, a break to the upside looks more likely at the moment and the green resistance is the one to watch for next week.”

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