CHICAGO, Feb. 7 (Xinhua) — Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as continued political uncertainty in the U.S. gave support to the precious metal. The most active gold contract for March delivery rose 4 U.S. dollars, or 0.32 percent, to settle at 1,234.90 dollars per ounce.
Gold was given support as Tuesday saw the beginning of oral arguments over the President’s travel ban in a federal court. Traders are concerned that U.S. President Donald Trump’s policy agenda may face significant opposition, lending support to the precious metal as investors became unsure of the political climate in the United States.
This led gold to four straight session increases, as traders are weighing the possibility that the U.S. president may have further actions blocked by the judiciary branch or opposition party in the legislative branch.
However, gold was put under pressure the U.S. Dollar Index rose by 0.37 percent to 100.27 as of 1915 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
Any further increase in the price of gold was likely dampened as Philadelphia Federal Reserve Bank President Patrick Harker hinted at a possible Fed rate hike during the March Federal Open Market Committee (FOMC) meeting. The Fed’s members normally uses speeches after its FOMC meetings to clarify their positions.
Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest. According to the CME Group’s Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 9 percent at the March meeting and 28 percent for the May meeting.
Investors are waiting for the release of several Fed speeches and economic reports later this week. Weekly jobless claims and a speech by St. Louis Fed President James Bullard is due on Thursday and the consumer sentiment report is due on Friday.
Silver for March delivery rose 6.3 cents, or 0.36 percent, to close at 17.756 dollars per ounce. Platinum for April delivery fell 1.2 dollars, or 0.12 percent, to close at 1,012.90 dollars per ounce.