Investing.com – Gold prices remained at their highest since August 2016 buoyed by ongoing weakness in the dollar amid a surging euro and recent comments from Treasury Secretary Steven Mnuchin.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $6.70, or 0.49%, to $1,363 a troy ounce.
The ongoing fall in the dollar continued to support gold as the yellow metal traded just shy of session highs after European Central Bank president Mario Draghi failed to curb investor expectations that the central bank is poised to hurtle toward steeper monetary policy measures.
This dollar has trended lower since mid-December but is on track to post its biggest monthly decline since May after Mnuchin’s endorsement of a weaker dollar weighed heavily.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – a decline in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
Yet Scotiabank warned that continued rhetoric on a weaker dollar may trigger “imported US inflation risk” strengthening the Federal Reserve’s case for a faster pace of monetary policy tightening.
Gold is sensitive to moves higher in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
In other precious metal trade, silver futures rose 0.43% to $17.57 a troy ounce, while platinum futures 1.43% to $1,030.
Copper fell 0.45% to $3.21, while natural gas fell 0.91% to $3.48. The nearly 1% slump in natural gas comes despite data showing natural gas storage supplies fell more than estimated.