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Gold Futures Settle Modestly Higher

Gold futures settled modestly higher on Tuesday, as the U.S. dollar drifted lower after data showed consumer prices to have seen a modest increase in the month of February.

Meanwhile, traders were looking ahead to the crucial vote on British Prime Minister Theresa May's Brexit plan. According to latest reports, May's Brexit plan has been soundly defeated by the British Parliament.

The dollar index dropped to 96.91 before edging up slightly to 96.93, still down by about 0.2% from previous close.

Gold futures for April ended up $7.00, or 0.5%, at $1,298.10 an ounce. A technical issue resulted in the delay of publishing some metals and energy settlements on Comex and the Nymex today.

On Monday, gold futures for April ended down $8.20, or 0.6%, at $1,291.10 an ounce.

Silver futures for May ended up $0.139, at $15.413 an ounce, while Copper futures for May settled at $2.9285 per pound, gaining $0.0275 for the session.

According to the report released by the Labor Department Tuesday morning, consumer prices showed a modest increase in the month of February, after reporting no change in consumer prices over the past few months.

The report said the consumer price index rose by 0.2% in February after coming in unchanged for three straight months. The uptick in consumer prices matched economist estimates.

Excluding food and energy prices, core consumer prices inched up by 0.1% in the month, after rising by 0.2% in January. Economists had expected another 0.2% increase in prices.

The slower pace of consumer price growth justifies the Federal Reserve supporting the real economy by being patient and leaving interest rates on hold for a potentially extended period, said Paul Ashworth, Chief U.S. Economist at Capital Economics.

On Monday, the Federal Reserve chairman Jerome Powell said that the U.S. central bank is in no rush to adjust borrowing costs, given muted inflation pressures and a slowing global economy.

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