Gold prices extended their rebound from nine-month lows to score back-to-back gains last week as the rally in the U.S. dollar stalled.
Gold has been “hit pretty hard in the last couple of weeks and…is stabilizing and base building just as [the U.S. dollar] has become exhausted and has started to level off,” Colin Cieszynski, chief market analyst at CMC Markets, told MarketWatch.
Gold futures for December delivery GCZ6, +0.06% tacked on $1.40, or 0.1%, to settle at $1,211.20 an ounce after posting losses earlier in the session. It climbed Monday, but settled at $1,208.70 on Friday, its lowest finish since February.
Gold is likely to continue its struggle against “a stronger dollar, soaring equity markets and the prospect of further [Fed] rate increases that could follow the widely-expected increase slated for next month,” said Edward Meir, independent commodity consultant at INTL FCStone, in a note.
The ICE U.S. Dollar Index DXY, +0.01% a measure of the dollar against six rivals, traded nearly flat Tuesday, though the greenback was mixed against its largest rivals. The index hit 101.54 last week, its highest since April 2003.
Higher rates are typically negative for nonyielding gold and positive for the dollar, which can cut demand for precious metals priced in the greenback.