Falling Dollar and Rate Cuts Push Gold Higher

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Commodities, Precious Metals

A  new federal rate could keep gold futures rising. As the Federal Reserve reduced rates to a target point between zero percent and .25 percent, the U.S. dollar weakened. The dollar index fell nearly two percent; the perfect condition, of course, for another gold rush.Gold futures for February ended on a high note yesterday, rising to $857.50 per ounce in after-hours electronic trading. Gold advanced 2.3 percent on the Comex division of the New York Mercantile Exchange, where the precious metal reached $842.70 per ounce before the day’s end.

Meanwhile, the December contract also rose, although not as much as the gold prepped for February delivery. According to MarketWatch, “Open interest, or the number of outstanding contracts of the December contract, stood at 831 as of Monday, or 83,100 ounces, according to Comex data.”

Last week, gold gained nine percent, its greatest jump in months. Gold looks to rise even more, too, due to stimulus-provoked concerns over a possible inflation. As usual, a falling dollar could equal higher and higher gold futures.

–Amy Edwards

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