Gold futures headed higher Monday as weakness in the U.S. dollar helped to prop up the yellow metal ahead of a policy update from the Federal Reserve at the middle of the week and a U.K. general election that could roil markets.
The coming two-day Fed meeting, which begins Tuesday and concludes with a monetary policy decision on Wednesday, has held “gold in check,” said George Gero, managing director at RBC Wealth Management. “While buyers wait [for] more headlines and news items, there is little reason for long term holders to sell now.”
For now, prices are range bound in the $1,450 to $1,500 range, 1450-1500 range bound but looking to move “higher soon,” he said, in a daily update.
February gold GCG20, -0.08% on Comex picked up $1.80, or 0.1%, to trade at $1,466.90 an ounce, after declining 0.5% last week. March silver SIH20, +0.17%, meanwhile, added 6.4 cents, or 0.4%, at $16.66 an ounce, following a weekly decline of 3%, according to FactSet data.
On Monday, precious metals, after sinking on the back of a hotter-than-expected U.S. jobs report on Friday, appeared to be at least partly buoyed by economic reports out of China that showed the world’s second-largest economy continued to be hurt by trade conflicts and a global economic slowdown.
China trade data showed that exports to the U.S. had fallen 23% year-over-year in November. More broadly, exports to all countries fell 1.1% year-over-year.
Meanwhile, the dollar, as measured by the ICE U.S. Dollar Index DXY, -0.04%, was down 0.1% on Monday, following a retreat 0.6% last week. The index gauges the buck against a half-dozen currencies, with weakness in the dollar usually helping to support gains in assets priced in bucks because it makes those assets less expensive to buyers using other monetary units.
Weakness in the dollar came as the British pound GBPUSD, +0.0837% ticked higher ahead of U.K. elections on Thursday, with weekend polls indicating that Prime Minister Boris Johnson and his Conservative Party will have a strong outcome, as he attempts to push Britain out of the European Union.
Before that general election, the Fed will host its last meeting of 2019, though the central bank is expected to stand pat this week, commodity investors will look at the gathering of the rate-setting Federal Open Market Committee to garner more direction about interest-rate policy and economic stimulus.
Among other metals traded on Comex, March copper HGH20, +1.21% traded at $2.755 a pound, up 1.1%.
“Over the weekend China announced copper imports hit a 13 month high last month and they cited improved factory activity for those strong imports therefore, traders should not discount the capacity for March copper to regain $2.80 in the coming weeks.,” said analysts at Zaner Metals, in a daily note.
January platinum PLF20, -0.24% tacked on 0.1% to $900.20 an ounce and March palladium PAH20, +0.60% rose 0.9% to $1,862.80 an ounce.