Gold Futures Settle Higher On Weaker Dollar

Gold futures settled higher on Wednesday, as a weak dollar and lower Treasury yields pushed up the demand for the safe haven yellow metal.

In addition to digesting the U.K.'s budget and the Bank of Canada's policy announcement, traders also looked ahead to the upcoming monetary policy announcements from the Bank of Japan and the European Central Bank.

The Bank of Canada today left its interest rate unchanged but terminated its Quantitative Easing program, citing the progress in the economic recovery.

Meanwhile, U.K. Chancellor Rishi Sunak announced public spending would increase by a massive 150 billion pounds in an effort to underpin a strong economic recovery after the crisis caused by the coronavirus pandemic.

The dollar index dropped to 93.69 before recovering some ground. It was last seen hovering around 93.80, down 0.16% from the previous close.

The yield on the U.S. 10-year Treasury note dropped to around 1.565% around noon, while the yield on the 30-year Treasury bond fell to 1.973%.

Gold futures for December ended up by $5.40 or about 0.3% at $1,788.80 an ounce, recovering well from the day's low of $1,784.30 an ounce. Gold futures had ended lower by about 0.7% on Tuesday.

Silver futures for December ended higher by $0.103 at $24.191 an ounce, while Copper futures for December settled at $4.3895 per pound, down $0.0965 from the previous close.

Data released by the Commerce Department showed durable goods orders pulled back by much less than expected in the month of September, falling by 0.4% after jumping by a downwardly revised 1.3% in August.

Economists had expected durable goods orders to slump by 1.1% compared to the 1.8% spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders climbed by 0.4% in September after rising by 0.3% in August. The increase matched economist estimates.

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