Gold Prices Undermined By Dollar Recovery, Risk Conditions Stay In Focus

Lloyd Doyle
September 13, 2017

North American stock market indexes jumped Monday after hurricane Irma weakened without causing as much damage as feared, while the loonie slowed its pace of recent gains.

All 11 major S&P 500 sectors rose, led by financial stocks, with insurers advancing as Irma, once ranked as one of the most powerful hurricane recorded in the Atlantic, lost power.

The Standard & Poor's 500 index climbed 26.68 points, or 1.1 percent, to 2,488.11.

The Dow Jones Industrial Average .DJI jumped 259.58 points, or 1.19 percent, to 22,057.37. The Russell 2000 index of smaller-company stocks added 15 points, or 1.1 percent, to 1,414. The Shanghai Composite trading higher by 0.03 percent and the Shenzhen Composite was off by 0.011 percent.

Japan's Nikkei 225 rose 1 percent as the dollar held onto overnight gains against the yen.

Provident (PFG.L) was the top gainer with a 3.8 percent rise as other British financial shares rose in line with Europe and Wall Street after Hurricane Irma weakened to a Category 1 storm. USA gold futures for December delivery were down 0,9 percent at $1,339.20.

The United States and its allies had been bracing for another long-range missile launch in time for the 69th anniversary of North Korea's founding on Saturday.

Still, he said, concerns about the simmering tensions on the Korea peninsula remain a source of pressure on the dollar, as well as the possible hit to US growth from Hurricane Irma as it ravaged Florida.

Gold prices fell early on Monday after hitting its highest in over a year in the previous session, as the dollar recovered from last week's lows and as lack of geopolitical developments dented safe-haven appeal.

MARKET INSIGHT: "Traders have started the new week hungry for risk, pushing equities and base metals higher on reduced concerns about North Korea and Hurricane Irma", said Mike van Dulken, head of research at Accendo Markets.

The dollar advanced cautiously Monday against most rivals, rising from its deepest weekly drop in two months, as renewed interest in riskier assets benefited the US unit.

Spot gold XAU= dropped 1.4 percent to $1,327.40 an ounce.

- The yield on 10-year Treasuries rose eight basis points to 2.13 percent, the highest in a week.

ENERGY: Benchmark U.S. crude rose 16 cents to $48.23 a barrel, while Brent crude, used to price global oils, was up 26 cents to $54.10 a barrel in London. USA crude was off 0.04 percent at $48.05 a barrel after settling 1.2 percent higher overnight.

The dollar also rose against the Chinese yuan, which pulled away from a 21-month high set on Friday.

The October natural gas contract gained six cents to US$2.95 per mmBTU and the December copper contract added two cents to US$3.07 a pound.

DOLLAR BENEFITS TOO: The dollar, which has endured a few hard weeks on a combination of factors, including elevated geopolitical risks, was tracking stocks higher.

Other reports by Iphone Fresh

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