Prices rise as the dollar eases
Bullion prices jumped higher on Tuesday, 18 November 2014. Gold prices jumped on Tuesday as the dollar eased against major currencies amid economic and political news, and as equities continued to get stuck in a tight trading range. The dollar's fall against major currencies resulted in gold prices moving higher. The dollar underpins gold contract trading.
Gold for December delivery gained $13.60, or 1.2%, to settle at $1,197.10 an ounce.
December silver tacked on 12 cents, or 0.7%, to $16.17 an ounce.
A day earlier, gold prices failed to defend back-to-back gains, feeling the weight of declining institutional demand for the precious metal.
Gold prices also benefitted from news India's gold exports are increasing and hit the highest level in over a year in October. However, reports Tuesday also said the Indian government could soon announce a plan to reduce gold imports in order to improve the trade deficit.
In overnight news, European stock markets and the Euro currency rallied due in part to an upbeat German ZEW economic expectations index for November that handily beat market expectations. The index was forecast to come in at 0.9 but posted a reading of 11.5. In October the ZEW index came in at -3.6. European equities also saw buying support after European Central Bank chief Mario Draghi reiterated on Monday that the ECB could purchase EU government bonds (quantitative easing), if necessary.
In Japan, Prime Minister Abe called for snap elections as he announced a delay in a sales tax increase measure by 18 months. It was reported Monday that Japan's economy has slipped into recession following a third-quarter GDP report that showed contraction in Japan's economy. The Japanese stock market was lifted on the Abe news.
U.S. economic data released Tuesday included the producer price index, Treasury international capital data, and the NAHB housing market index. The PPI came in hotter than expected but the market place paid little attention to it.
Powered by Capital Market - Live News
