Gold prices held near their highest level in around four months in early dealings on Tuesday, supported by a weaker U.S. dollar languishing near three-year lows
Gold Prices Stay Near 4-Month High Amid Dollar Weakness- Gold prices held near their highest level in around four months in early dealings on Tuesday, supported by a weaker U.S. dollar languishing near three-year lows. Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies. The yellow metal did not settle on Monday due to the U.S. Martin Luther King Day holiday. The dollar index, which gauges the U.S. currency against a basket of six major rivals, wallowed at more than three-year lows. It was last at 90.35, after dropping as low as 90.05 on Monday, its deepest nadir since December 2014. The greenback has been on the backfoot since last week on rising expectations that central banks in Japan and the euro zone could pare their monetary stimulus. The majority of economists believe that the Federal Reserve will hike rates in March with a second move higher arriving in June, according to Fed Rate
Oil prices near three-year highs, supported by healthy demand – Brent crude oil prices held near $70 a barrel on Tuesday, a level not seen since 2014’s dramatic market slump. Prices have been driven up by production curbs in OPEC nations and Russia, as well by strong demand thanks to healthy economic growth. Oil has been pushed higher by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to withhold production since January last year. The cuts are set to last through 2018. The restraint has coincided with healthy oil demand, pushing up crude by almost 15 percent since early December. “This rally has been driven first by robust fundamentals, with strong demand growth and high OPEC compliance accelerating,” U.S. bank Goldman Sachs (NYSE:GS) said in a note on Tuesday. “We see increasing upside risks to our $62 per barrel Brent and $57.5 per barrel WTI forecast for the coming months,” it added.
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