Gold Prices Rally As U.S. Dollar Index Slumps
New York (Nov 22) Gold prices ended the U.S. day session with good gains Wednesday. The precious metals markets got buying support come from outside markets that were in a bullish daily posture—a solidly lower U.S. dollar index and higher crude oil prices. December Comex gold was last up $3.00 an ounce at $1,284.80. Dec Comex silver was last up $0.02 at $16.98 an ounce.
This afternoon’s release of the minutes from the last Federal Open Market Committee (FOMC) meeting showed members somewhat concerned about continuing low inflationary price pressures. The markets moved very little on the FOMC minutes release, which contained no surprises.
The U.S. dollar index has been trending lower for the past two weeks and is poised to drop to a four-week low if prices drop just a bit more this week. There has been a strong inverse relationship between gold and the U.S. dollar index in recent weeks—stronger than it has been in a long time. Some of this strong inverse relationship is due to the fact there has not been any major, fresh fundamental news developments to cause the gold market to see a price trend.
Meantime, NY Crude Oil futures prices were solidly higher and were poised to close at a two-year high close, basis January futures, as of this writing. Oil bulls have the firm overall near-term technical advantage. However, stiff chart resistance layers lie just above the market. Traders are looking ahead to next week’s OPEC meeting.
U.S. markets are closed for the Thanksgiving holiday on Thursday. The Friday after Thanksgiving is typically one of the lightest-volume trading days of the year for many markets.
Reuters
