Gold Prices Up in Asia As Trending Weaker Dollar Aids Sentiment

Wednesday,   17-Jan-2018   09:22 AM (IST)

Gold prices gained in Asia on Wednesday with a weaker dolalr helping demand for the precious metal priced int he US currency.Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose 0.51% to $1,343.90 a troy ounce.Overnight, gold prices traded roughly unchanged on Tuesday, shrugging off a rebound in the dollar from three-year lows as data showed traders remained bullish on the precious metal despite the uptick in demand for risker assets.Gold prices remained close to four-month highs amid ongoing demand for the yellow metal as data showed traders increased their bullish bets on gold for the fourth-straight week.Speculative net long position in gold rose by 40,000 contracts to a net long 203,300 contracts, a six-week high, according to the most recent Commitment of Traders (COT) report.Gold’s strong start to the year comes against continued risk-on sentiment as global equities extended their gains from 2017, rising to all-time highs. Some market participants, however, said they expected the yellow metal to range trade in 2018 amid expectations of additional Federal Reserve rate hikes this year.In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.