Gold price climbs above $1,260/oz on weaker dollar

Gold was in positive territory on the morning of Tuesday, October 18, after the dollar gave up earlier gains, reflecting forecast-missing data.

The US Empire State manufacturing index, the capacity utilization rate and industrial production all fell short of estimates on Monday. The dollar index was recently at 97.71, down 0.15% on Monday’s close.

The spot gold price was recently quoted at $1,261.85/1,262.15 per oz in London, up $6.50 on the previous closing level. Trade has ranged from $1,254.30 to $1,262.60 so far.

Wednesday’s run of economic data from China will be of interest after last week’s soft trade data – in particular, the country will publish its third-quarter GDP growth figure, which is forecast at 6.7%. Before then, attention is focused on US inflation data. A rise in the core inflation rate would favour a rise in US interest rates in December, which would weigh on the gold price, Commerzbank noted.

“A December rate rise is somewhat factored into the [gold] price already, so any opposite economic indicators will affect the price on the upside far more than confirmation figures will on the downside,” David Govett, head of precious metals at Marex Spectron, said. “So I would continue to buy dips unless any [counter-] developments raise their head.”

In the other precious metals, spot silver at $17.625/17.665 per oz was up 19 cents. Platinum climbed $14 to $944/950 and palladium at $641/646 was $8.50 higher.

(Editing by Mark Shaw)

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