Gold futures traded higher Monday, as positive developments in Europe weighed on the dollar, providing a runway higher for bullion.
Gold for December delivery GCZ8, +0.06% trading on Comex rose 0.2% at $1,225.30 an ounce, after registering a weekly climb of less than 0.1% on Friday.
The British pound GBPUSD, +0.3361% and the euro EURUSD, +0.0529% were strengthening, putting pressure on a gauge of the dollar, the ICE U.S. Dollar Index DXY, -0.01% amid reports that the Italian government is making concessions with the European Commission over its budget by altering its fiscal proposal so that its projected deficit is near 2% of gross domestic product, down from 2.4%.
Meanwhile, the approval by the European Union of Britain’s divorce from the trading bloc also has provided buoyancy to sterling. If the deal is given a green light by Parliament, the U.K. will then be able to focus on negotiations for the new trade and security relations with EU after it’s official exit in March. U.K. Prime Minister Theresa May, however, is seen facing an uphill battle in winning parliamentary approval.
The dollar gauge was down 0.2% at 96.77. A weaker buck can make gold more attractive to users of other currencies.
Stephen Innes, head of Asia-Pacific trading at Oanda said “dollar movements will ultimately provide gold’s near-term direction, early in the week. Last week the [U.S. dollar] was supported by global growth concerns.”
Separately, December silver SIZ8, +0.12% rose 8 cents, or 0.2%, to $14.320 an ounce, after the metal on Friday put in a weekly decline of 0.9%.
In exchange-traded fund trading, the SPDR Gold Shares GLD, -0.15% was up 0.1% in premarket trade Monday, while the iShares Silver Trust SLV, -0.19% added 0.5%. The VanEck Vectors Gold Miners ETF GDX, +0.26% advanced 0.8% before the bell.
