Gold prices on Tuesday were headed higher for a second straight session as a pullback in the U.S. dollar extended, providing room for bullion values to climb, commodity experts said.
“As soon as the dollar’s recovery stopped, gold has been able to rebound, consolidating the strength of the support placed at $1,850-$1,860,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a daily note.
On Monday, December gold
was up $9.70, or 0.5%, at $1,891.90 an ounce, after a 0.9% rise on Monday. The metal hasn’t posted consecutive daily gains since a three-day stretch ended Sept. 16, FactSet data show.
The dollar on Tuesday was down 0.2%, as measured by the ICE U.S. Dollar Index
FactSet data show. The index is down 0.6% so far this early week, after posting a 1.9% weekly rise last week.
Last week, gold and silver prices came under pressure due to the mini rally in the greenback which can make assets priced in the currency relatively more expensive to overseas buyers.
Gold enthusiasts and some commodity experts say that gold remains a strong investment in the long term, given persistent concerns about the global economy and monetary policies implemented to combat the COVID-19 pandemic.
Analysts say that demand from exchange-traded funds, which must buy gold to mimic the performance of the commodity, also have been a key driver of price gains.
“From a fundamental point of view, despite the recent slowdown of the price, ETF demand remains stellar, while central banks are still printing money in order to mitigate impact of the economic crisis generated by COVID, a scenario that is likely to last for at least all of 2021,” De Casa wrote.
The gold-focused ETF, the SPDR Gold Trust ETF
Meanwhile, December silver
picked up 47 cents, or nearly 2%, at $24.075 an ounce, following a 2.2% advance for gold’s sister metal in the prior session.