LONDON: Gold rose yesterday as the dollar declined but was still headed for its biggest monthly drop in five months on signs that recovery in the US economy could lead to the curbing of easy central bank money.
Gold has shed more than five percent in November and has lost around a quarter of its value so far this year, which puts it on track to post its first annual loss in 13 years.
It has stayed below $1,300 for the past three weeks and has been largely range-bound in the last few sessions due to thin trading around the US Thanksgiving holiday on Thursday.
Spot gold rose 0.7 percent to $1,252.15 an ounce by 1500 GMT. It had fallen to a 4-1/2 month low of $1,227.34 on Monday. US gold futures rose 1.2 percent to $1,252.50 an ounce.
The dollar fell 0.2 percent against a basket of currencies, while US Treasury yields steadied above 2.7 percent, and world shares rose.
“We are probably going to see gold coming back off again, as we have real yields in the US moving up a little bit ... and equity markets stronger,” Deutsche Bank analyst Michael Lewis said.
Traders see the next resistance levels at $1,255 and $1,290, while support stands in the $1,220 area.
Solid US data over the past few weeks could bolster the case for the US central bank curbing stimulus soon.
reuters
