Bright day for precious metals

Gold ends at highest level in three months

Bullion prices ended higher at Comex on Monday, 12 October 2015. Gold futures posted their highest close in more than three months on Monday, as the yellow metal extended its gains from the prior week amid bets for a further delay in U.S. interest-rate hikes.

Gold for December delivery settled $8.60, or 0.7%, higher at $1,164.50 an ounce on Comex for its highest settlement since July 6, when the precious metal finished at $1,173.20. Meanwhile, December silver tacked on 4 cents, or 0.2%, to finish at $15.86 an ounce.

Gold prices ended a subdued U.S. trading session moderately up and hit another six-week high on Monday. World markets were quieter and uneventful on Monday. Japan's markets were closed for a holiday. The Columbus Day holiday Monday kept most U.S. markets squelched as the U.S. government was closed and no U.S. economic data was released.

Discussion in the marketplace remains on U.S. Federal Reserve monetary policy and just when the Fed might raise U.S. interest rates for the first time in several years. Recent weaker U.S. economic data (namely the employment reports of the past two months) have led many to believe the Fed won't raise interest rates this year. This growing notion has been bullish for stocks, most raw commodity markets and U.S. Treasuries, but has been bearish for the U.S. dollar.

The outside markets on Monday saw the U.S. dollar index slightly lower and at a three-week low. Crude oil prices traded sharply lower on Monday on a corrective pullback after hitting a 2.5-month high of $50.92 a barrel Friday. The Russian military action in Syria had helped to give the geopolitically sensitive oil markets a boost recently.

Against the backdrop of low rates and an uncertain political environment, gold has enjoyed a rebound because it doesn't yield interest and competes more easily against assets that do, like Treasurys, when rates are pinned near zero. Investors have interpreted Federal Reserve minutes that were released on Thursday as providing further proof that U.S. interest rates may remain on hold for the rest of 2015.

Weakness in the dollar which was wavering in Monday trade, has helped give gold a lift. A stronger greenback can weigh on dollar-denominated commodities like gold because it makes them pricier for holders of other currencies.

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