Gold Crosses $4,100 to Reach Two-Week High as Dollar Falls

Photo: Business Recorder

Gold crossed $4,100 an ounce on Thursday to reach its highest price in more than two weeks, capping a sharp comeback for the metal. Spot gold rose to $4,123.39 an ounce after touching $4,146.63, its best since 20 October, and it has now gained nearly 6 percent in a single week.

The metal has climbed more than $250 this week from a one-year low of $3,869.85 hit on Friday. Wednesday's jump of nearly 3.4 percent was its sharpest daily rise since 19 August. US gold futures for December delivery rose 1.5 percent to $4,132.90 an ounce.

Two things are pushing gold up. The US dollar sat at its lowest since 30 September, which makes gold cheaper for buyers using other currencies. And the yield on the 10-year US Treasury bond fell to a near two-month low, which makes gold more attractive because it pays no interest. Lower oil prices also eased fears about inflation, with Brent crude staying below $100 a barrel after tumbling nearly 9 percent in the last session. Oil had crashed below $95 earlier this week, and petrol in Pakistan fell Rs9.41 a litre as a result.

"It's not that at this point rate hike expectation has completely disappeared," David Meger, director of metals trading at High Ridge Futures, said. "As we've seen the weaker energy prices, there's an expectation that we will see some fears of inflation subside and the potential for a lesser need for rate hikes down the road."

In Pakistan, the local rate tracked the world rise, with 24K gold quoted near Rs428,000 a tola on Friday morning, a little higher than the Rs426,036 quoted on Wednesday, when gold had jumped Rs13,900 in a day. For buyers, that means jewellery and wedding shopping stays dear, and anyone who bought at Friday's low has seen the value of their gold climb by more than $250 an ounce in a week. The PSX rally shows the same mood in Pakistani markets, where investors are chasing hard assets.

Friday's US jobs report is the next big test. Traders see an 80 percent chance that the Federal Reserve will raise rates in December, according to CME's FedWatch tool. A strong jobs report could push gold back down, said independent metals trader Tai Wong, while a weak one would help it hold above $4,100.

Other metals rose too. Spot silver was up 1.2 percent to $52.81 an ounce, platinum gained 2.3 percent to $1,531.84 and palladium climbed 4.67 percent to $1,051.46.

Gold at a glance:

• Spot gold: $4,123.39 an ounce, up 1.57 percent on Thursday
• Session high: $4,146.63, the best since 20 October
• Weekly gain: nearly 6 percent, up over $250 from Friday's low of $3,869.85
• December futures: $4,132.90 an ounce
• Pakistan 24K: near Rs428,000 a tola, up from Rs426,036 on Wednesday

Sources

• Business Recorder: Gold at over two-week high as dollar, yields weaken
• ET Now: Gold price today, November 6: Bullion climbs above $4,100, gains nearly 6% this week
• PakGold: Gold rate in Pakistan cities today

All eyes are now on the US jobs report due on Friday, which could decide whether gold holds above $4,100 or slips back.

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