Metals: Gold Closes at Highest Level Since September 2016

By Amrith Ramkumar Features Dow Jones Newswires

Gold prices continued climbing Monday, buoyed by a weaker dollar after a recent meeting of global central bankers offered few clues about the future of monetary policy.

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Gold for December delivery was recently up 0.4% at $1,303.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The precious metal closed at its highest level Friday since early June after speeches by Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole, Wyo., economic symposium didn't specifically address the timing of future rate increases.

Division among Fed officials about when to raise rates amid sluggish inflation has been one of the factors supporting gold prices this year, as gold struggles to compete with yield-bearing assets such as Treasurys when borrowing costs rise.

Some investors and analysts said they had hoped for some clues from Jackson Hole about plans to unwind monetary stimulus, driving the dollar lower. A weaker dollar makes gold less expensive to foreign buyers. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently down 0.1%.

Still, with gold prices up more than 12% this year, some investors and analysts cautioned against reading too much into Monday's move higher, with markets in the U.K. closed for a public holiday.

Many think it will be tough for the precious metal to climb much higher unless geopolitical tension between the U.S. and North Korea escalates. Threats by the two countries had supported gold prices in recent weeks, as many investors favor gold during times of political uncertainty.

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"Unless we get some real tensions going, there's no real reason for gold to move up," said Christopher Ecclestone, mining strategist at research firm Hallgarten & Co.

Many investors and analysts are waiting to see whether gold can stay above $1,300, a key psychological and technical barrier, in the coming days. Personal-consumption expenditures inflation data and the monthly jobs numbers are due later this week, which could affect some investor views about the possibility of a third interest-rate increase in 2017.

Among base metals, copper for September delivery was recently up 1.1% at $3.0660 a pound. Earlier in the session, the industrial metal hit $3.0820 -- its highest price in almost three years.

Chinese economic strength and supply disruptions have boosted the outlook for copper this summer, and many investors will be closely watching economic data out of China later in the week to see whether the recent rally can continue. China accounts for nearly half of the world's copper consumption.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

Gold prices continued climbing Monday, buoyed by a weaker dollar after a recent meeting of global central bankers offered few clues about the future of monetary policy.

Gold for December delivery closed up 1.3% at $1,315.30 a troy ounce on the Comex division of the New York Mercantile Exchange. Monday's advance marked the most actively traded gold contract's largest one-day advance since May 17 and its highest close since September 2016. The precious metal closed at its highest level Friday since early June after speeches by Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole, Wyo., economic symposium didn't specifically address the timing of future rate increases.

Division among Fed officials about when to raise rates amid sluggish inflation has been one of the factors supporting gold prices this year, as gold struggles to compete with yield-bearing assets such as Treasurys when borrowing costs rise.

Some investors and analysts said they had hoped for some clues from Jackson Hole about plans to unwind monetary stimulus, driving the dollar lower. A weaker dollar makes gold less expensive to foreign buyers. The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently down 0.3%.

Gold prices spiked around 11 a.m. Eastern time, jumping from roughly up 0.5% to up 1%, before continuing to tick higher.

"You caught a group of buys there," said Ira Epstein, a strategist at the Linn Group. "Gold is spiking because the central bankers really didn't do anything," he said.

U.S. political uncertainty has also supported gold prices in recent sessions, with worry about the federal debt ceiling creeping into the market.

Still, with gold prices up 14% this year, some investors and analysts cautioned against reading too much into Monday's move higher, with markets in the U.K. closed for a public holiday.

Many think it will be tough for the precious metal to climb much higher unless geopolitical tension between the U.S. and North Korea escalates. Threats by the two countries had supported gold prices in recent weeks, as many investors favor gold during times of political uncertainty.

"Unless we get some real tensions going, there's no real reason for gold to move up," said Christopher Ecclestone, mining strategist at research firm Hallgarten & Co.

Many investors and analysts are waiting to see whether gold can stay above $1,300, a key psychological and technical barrier, in the coming days. Personal-consumption expenditures inflation data and the monthly jobs numbers are due later this week, which could affect some investor views about the possibility of a third interest-rate increase in 2017.

Among base metals, copper for September delivery settled up 1% at $3.0630 a pound -- its highest close since November 2014.

Chinese economic strength and supply disruptions have boosted the outlook for copper this summer, and many investors will be closely watching economic data out of China later in the week to see whether the recent rally can continue. China accounts for nearly half of the world's copper consumption.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

August 28, 2017 15:34 ET (19:34 GMT)