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Metals Stocks: Gold prices mark first gain in 3 sessions as U.S. dollar weakens

Gold futures ended higher on Tuesday, bucking headwinds from a rise in global stocks, as a weaker U.S. dollar helped prices for the precious metal score their first gain in three sessions.

Gold prices have recovered slowly in October, caught between worries about rising inflation and concerns that central banks might lift interest rates in response, along with growing anxieties about waning global economic growth.

“The precious metal is likely to be influenced by conflicting forces this week as investors juggle growth concerns and inflation fears amid prospects of tighter monetary policy,” wrote Lukman Otunuga, senior research analyst at FXTM, in a note.

The dollar was down 0.3% as measured by the popular ICE U.S. Dollar Index
DXY,
-0.27%
,
which tracks the currency’s strength against six currencies. A weaker dollar makes dollar-priced assets comparatively less expensive for overseas buyers.

On Tuesday, gold futures for December delivery
GCZ21,
+0.24%

GC00,
+0.24%

climbed by $4.80, or 0.3%, to settle at $1,770.50 an ounce, following a 0.2% decline on Monday, which was its second straight decline.

“Should the dollar continue to weaken, gold has the potential to rechallenge $1,800, a level just above the 100-day and 200-day Simple Moving Average,” said Otunuga. Gold futures touched an intraday high above $1,800 on Thursday, but haven’t settled above that level since mid-September.

For now, “intraday bulls seem to be in the driving seat, with the first level of interest at $1,784,” Otunuga said.

Meanwhile, December silver
SIZ21,
+2.24%

SI00,
+2.24%

rose 62 cents, or 2.7%, at $23.883 an ounce, with the most-active contract logging its highest settlement since Sept. 14, FactSet data show. Prices had touched intraday highs above $24 for the first time since Sept. 10,.

Rounding out action on Comex, December copper
HGZ21,
-0.50%

edge down by 0.5% to $4.703 a pound. January platinum
PLF22,
+0.62%

tacked on 0.9% to $1,047.10 an ounce and December palladium
PAZ21,
+3.77%

settled at $2,100.90 an ounce, up 4.4% for the session, with prices bouncing back after a 3.1% loss on Monday.

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