Gold prices swung between small gains and losses Monday after closing at their lowest level since July last week.
Gold for February delivery closed down 0.1% at $1,246.90 a troy ounce on the Comex division of the New York Mercantile Exchange in a third straight session of losses The dollar rebounding from multiyear lows and concerns about higher interest rates have pushed prices roughly 7.5% off their year-to-date high from early September.
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A dollar-denominated commodity, gold becomes more expensive for overseas buyers when the U.S. currency grows stronger. The dollar fell slightly Monday ahead of the Federal Reserve's two-day meeting that begins Tuesday. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, declined 0.1%.
Many investors and analysts have said they expect gold to fall ahead of the Fed's last meeting of 2017, with the central bank widely expected to raise interest rates for a third time this year.
"Right now, the path of least resistance for gold prices is sideways to lower," said Jim Wyckoff, senior analyst at Kitco Metals.
However, some have said doubts about the Fed's plans to raise rates three times again next year as inflation remains sluggish could boost prices after the meeting. Friday's jobs report once again showed tepid wage growth, another sign that inflationary pressures remain muted.
"Gold and precious metals tend to be bought on the fact of a rate hike, having been sold [off] previously," Jonathan Butler, a precious metals strategist at Mitsubishi, said in a note to clients.
Traders are also monitoring signs of geopolitical turbulence that tend to boost haven assets such as gold when investors believe markets might turn rocky. Some have said the continuing rise of major stock indexes around the world and recent popularity of cryptocurrencies have made gold a less attractive investment vehicle.
Among base metals, copper for March surged 1.1% to $3.0115 a pound, rising rapidly in midmorning trading. Monday's gains came after the industrial metal fell sharply last week back below $3 and about 7% off its three-year highs from October on concerns that demand from China, the world's largest consumer, will slow moving forward.
Still, prices are up nearly 20% for the year, with the Chinese economy having outperformed expectations in 2017. Data released Friday showed Chinese copper imports hit their highest level of the year in November. The dollar's weakness and oil prices rising were also supporting copper prices, as many investors trade the commodities in a single basket.
Write to Amrith Ramkumar at firstname.lastname@example.org and David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
December 11, 2017 15:02 ET (20:02 GMT)