Gold Futures Settle Higher For 2nd Straight Day

Gold futures settled higher on Tuesday as the dollar continued to exhibit weakness against most of its major counterparts with traders looking ahead to monetary policy meetings of the Bank of England and the European Central Bank and digesting the Australian central bank’s policy announcement.

Traders also reacted to comments from some Fed officials about likely policy moves by the central bank.

Kansas City Fed President Esther George said a big reduction in the balance sheet could allow the Fed to pursue a less aggressive strategy on short-term interest rates.

Separately, San Francisco Fed chief Mary Daly said policy moves “have to be gradual and not disruptive”.

The dollar index drifted down to 96.24 before moving up to 96.39 and recovering some lost ground. Still, the index is down 0.14% from the previous close.

Gold futures for April ended higher by $5.10 or about 0.3% at $1,801.50 an ounce, settling above the $1,800 mark for the first time in almost a week. Gold futures for April ended higher by $9.80 or about 0.6% at $1,796.40 an ounce on Monday.

Silver futures for March ended up by $0.202 at $22.595 an ounce, while Copper futures for March settled at $4.4340 per pound, up $0.1095 from the previous close.

In U.S. economic news, the Institute for Supply Management released a report showing growth in U.S. manufacturing activity continued to slow in the month of January.

The ISM said its manufacturing PMI fell to 57.6 in January from a revised 58.8 in December, although a reading above 50 still indicates growth in the sector. The index decreased for the third straight month, slipping to its lowest level in over a year.

Economists had expected the manufacturing PMI to drop to 57.5 from the 58.7 originally reported for the previous month.

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