Gold advanced to the highest in seven weeks, boosted as investor confidence in the dollar waivered amid doubts US interest rates will rise this year.
Meanwhile, oil prices retreated from their highest levels in more than a month yesterday as investors took profits after several days of sharp gains.
Oil has been on a rollercoaster ride over the last few weeks, recovering from six-year lows.
Bullion advanced in three of the past four weeks, rebounding from a five-year low in July, on speculation that the Federal Reserve will refrain from tightening monetary policy until next year.
The chances of a rate lift-off in December fell to 39% yesterday, from 59% a month earlier, futures data show.
While Fed vice chairman Stanley Fischer said on Sunday that the US economy may be strong enough to merit an increase by year-end, dollar investors shrugged off his comments as a gauge of the US currency touched a three-week low.
Gold prices “tend to reflect investors attitude toward monetary uncertainty and current or future central bank actions, primarily those of the Federal Reserve”, said Michael Cuggino, a fund manager at Pacific Heights Asset Management.
Gold futures for delivery in December gained 0.4% to $1,160.90 (€1,021.39 an ounce, after reaching $1,168.60, the highest since August. 24.
For crude oil markets, evidence that oil producers are reducing output in response to low prices has helped make sentiment more positive and many traders and analysts now expect prices to be higher next year as global fuel demand recovers.
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However, the upswing appears to have been too fast, analysts say, adding that heavy technical selling had set in. Benchmark Brent crude was down 70c a barrel at $51.95 at one stage yesterday, after reaching an earlier high of $53.31. US light crude was down 80c at $48.83.
Data from oil services company Baker Hughes last week showed US energy firms cut oil rigs for a sixth week in a row in a sign low prices are keeping drillers away from the well pad.
In the week ended October 6, money managers upped their net-long position in gold, silver, platinum, and palladium for a third week, helping to fuel rallies for the metals amid signs of a flagging US labour market, a drop in German factory orders and an IMF forecast for slower global expansion.
“You have the lower interest rates and you have the dollar story,” said Georgette Boele, a strategist at ABN Amro Bank in Amsterdam.
“They have a double impact because lower interest rates are usually supportive for precious metals and at the same time the weaker dollar is as well.”
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