2 months ago
Commodities

Gold Prices Hit 6-Month High as Weaker Dollar Lends Support

Investing.com - Gold prices traded higher on Thursday, touching a 6-month high, as a less-hawkish Federal Reserve led to a

Investing.com - Gold prices traded higher on Thursday, touching a 6-month high, as a less-hawkish Federal Reserve led to a weaker greenback, supporting the U.S. dollar-denominated precious metal.

At 11:23 AM ET (16:23 GMT), gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose $5.10, or 0.41%, to $1,261.50 a troy ounce. Its intraday peak of $1,265.65 was its highest level since June 26.

Meanwhile, the U.S. dollar index, which tracks the greenback against a basket of six major currencies, was down 0.34% to 96.15.

Although the Federal Reserve hiked rates as expected on Wednesday, policymakers reduced their expectations for increases next year to just two, compared to the prior three estimated in the September projections.

Markets remain skeptical with odds hovering at around 50% for just one hike at the end of the coming year.

Lower rates support demand for gold, which doesn’t bear interest, by making it more competitive with yield-bearing investments.

Skittishness in stocks also lent some support to the safe-haven commodity as investors reallocated assets.

Investing.com analyst Barani Krishnan pointed to the fact that $1,300 gold was “not impossible, just trickier.”

“The path to $1,300 remains alive for gold. But the precious metal will have to count on the stock market getting battered by fear of additional rate hikes and the dollar remaining lifeless, as in the current backdrop. It's an odd combination, to say the least,” Krishnan explained.

In other metals trading, silver futures edged down 0.17% at $14.793 a troy ounce by 11:25 AM ET (16:25 GMT).

Palladium futures fell 0.66% to $1,193.40 an ounce, while sister metal platinum lost 0.59% at $791.30.

In base metals, copper traded down 1.22% to $2.683 a pound.