Photographer: Lisi Niesner/Bloomberg

Gold Posts Biggest Advance in Four Weeks as Dollar Declines

  • Bullion’s relative-strength index signaled metal was oversold
  • Palladium heads for biggest monthly increase since 2008

Gold futures posted the biggest gain in almost four weeks as the dollar fell and investors bet the recent selloff was excessive. Palladium reached a 17-month high.

A Bloomberg gauge of the dollar declined from the highest in a decade as a retreat in Treasury yields sapped the currency’s appeal. Weakness in the dollar tends to help commodities priced in the currency. The metal’s 14-day relative-strength index was below 30 in the previous six sessions, signaling to some traders and analysts that gold was oversold.

Gold has slumped more than 6 percent this month as U.S. President-elect Donald Trump’s pledge to increase infrastructure spending boosts speculation that the Federal Reserve will raise interest rates in December, curbing demand for assets that don’t provide yield. A U.S. employment report due Dec. 2 will provide more clues on the outlook for rates, after wage gains accelerated and jobs continued to rise at a steady pace in October.

“There’s some rotation into gold as the dollar is down,” Jason Schenker, president of Prestige Economics LLC in Austin, Texas, said in a telephone interview. “What’s going to be really important for gold prices is the U.S. jobs numbers on Friday.”

Gold futures for February delivery climbed 1.1 percent to $1,193.80 an ounce at 1:42 p.m. on the Comex in New York. That marks the biggest gain for a most-active contract since Nov. 2. The metal fell below $1,200 last week for the first time since February.

Last week, investors sold the most gold through exchange-traded products in more than three years. Holdings dropped 39.2 metric tons through Friday to 1,893.3 tons, the lowest since June, data compiled by Bloomberg show.

In other precious metals:

  • Palladium for March delivery rose as much as 2.6 percent to $762 an ounce on the New York Mercantile Exchange, the highest since June 2015. The metal has surged 23 percent this month, heading for the biggest monthly gain since February 2008.
  • Platinum also advanced on the Nymex, while silver climbed on the Comex.

— With assistance by Luzi-Ann Javier, and Thomas Biesheuvel

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