Gold steadies as traders weigh outlook for Fed rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
Gold for December delivery rebounded Monday, finishing up $15.40 or almost 1% at $1,758 an ounce, after losing more than $40 over the past two trading days.
Gold futures hit highs just above the $1,800 an ounce level last week and is up more than 24% for the year. Monday marked the 40th anniversary of the US dropping the gold standard which pegged the conversion rate for one ounce at $35.
Most analysts do not expect demand for gold as a hedge against inflation to diminish and speculations that the US Fed will undertake a third round of monetary easing are mounting.
CNBC quotes one trader as saying: “Everybody is looking at gold for some particular reason or another, from central banks looking for a currency hedge to the average investor looking to diversify their portfolio and move money out of dollars.”
MarketWatch spoke to the chief executive officer at London-based bullion brokers Sharps Pixley, who said he wouldn’t be surprised to see some temporary weakness in gold, which looks “a little overbought.”
Silver also made strides on Monday and contracts for September delivery added 19.3 cents to finish at $39.307 an ounce.
