Gold Prices Creep Higher, Boosted by Weaker Dollar

Currencies Dow Jones Newswires

Gold prices edged higher Thursday, supported by a weaker dollar, as the rally in financial markets cooled.

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The precious metal gained 0.1% to trade at $1.228.20 a troy ounce in late morning trade in London.

Gold has been treading water this week, having dropped around 4% since Donald Trump's surprise U.S. presidential victory last week spurred a move towards riskier assets and away from so-called safe-haven investments like bullion.

A slightly weaker dollar gave a lift to gold Thursday. The WSJ Dollar Index, which tracks the greenback against a basket of peers, fell 0.2% to 90.44. The index remains nearly 3% up on its pre-election level, boosted by expectations that Mr. Trump's presidency will mean more expansive fiscal policy, higher inflation and higher interest rates.

Analysts at Commerzbank said bullion was "holding its own" given the strength of the dollar, rising bond yields that reduce the appeal of non-interest paying commodities and five consecutive days of outflows from exchange-traded funds that invest in gold.

BMI Research forecast further declines in precious metal prices.

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"The rise in real bond yields has undermined gold and silver prices and further weakness is likely in the near term," BMI said.

Palladium was up 0.78% at $719.50 an ounce Thursday. Silver rose 0.7% to $17.01 an ounce and platinum rose 0.2% to $943.25 an ounce.

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