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Money News

Gold inches up, but set for first monthly decline in five

(Reuters) - Gold prices edged up on Monday as the U.S. dollar weakened, although record high equities capped bullion’s gains and set it for its first monthly decline in five.

FILE PHOTO: Gold bars are pictured on display at Korea Gold Exchange in Seoul, South Korea, August 6, 2020. REUTERS/Kim Hong-Ji/File photo

Spot gold inched up 0.1% to $1,965.72 per ounce by 10:50 am EDT (1450 GMT). During the session it touched its highest since Aug. 19 at $1,976.14.

For the month of August, the metal was down 0.4%. During the month, it had surged to an all-time peak of $2,072.49.

U.S. gold futures eased 0.1% to $1,972.40.

“The weaker dollar and the anticipation that we are going to get a further dollar weakness has led to some small increases (in gold)” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

The dollar fell to its lowest since May 2018, against other major currencies.

“At present there is less risk aversion in the global marketplace, which is somewhat constraining the safe-haven metal’s bulls,” Kitco Metals senior analyst Jim Wyckoff said in a note.

World stocks hovered near record highs as investors bet on continued central bank monetary support to revive the coronavirus-hit economy.

However, “there is a significant concern that the (equities) market might have gotten extended and there might be some profit taking coming, which may lead to a rotation back to gold,” Sica said.

Gold has gained about 29% this year, supported by economic uncertainty stemming from the pandemic as well as the upcoming U.S. elections.

Last week, the Federal Reserve said it would adopt an average inflation target, meaning rates are likely to stay low even if inflation rises a bit in the future, which is supportive for gold.

Elsewhere, silver jumped 1.9% to $28.02 an ounce, on track for a fifth monthly gain.

Platinum gained 0.3% to $933.98, while palladium rose 3.1% to $2,274.45. Both were set for their second straight monthly gain.

Reporting by K. Sathya Narayanan in Bengaluru; Editing by David Gregorio

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