Gold rebounded on Monday from last week’s six-year low as the attacks in Paris prompted a bout of global risk aversion.
Spot gold rose as much as 1.4 percent to a 10-day high of $1,097.90 an ounce, and was last up 0.1 percent at $1,084.38, with U.S. gold futures were up 0.3 percent an ounce at $1,084.
In the first 10 minutes of Monday trade, nearly 3,000 lots changed hands, almost 10 times the 300-lot average for the opening 10 minutes over the past two months, Reuters’ calculations showed.
“Gold opened higher early this morning on the back of what happened over the weekend on perceived geopolitical risk, but it seems to be already short-lived because the bigger macroeconomic issues are the dollar’s strength and the (expected) U.S. rate hike,” Citi strategist David Wilson said.
“The metal is struggling to make it back above $1,100,” Saxo Bank senior manager Ole Hansen said.
Before Monday’s gains, gold had fallen for 12 sessions out of 13 on increasing bets that the Federal Reserve would raise U.S. interest rates next month, which would increase the opportunity cost of holding the non-yielding asset. It hit a near-six-year low of $1,074.26 on Thursday.
About Alfonso Esparza
Senior Currency Strategist, OANDA, Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto. Follow on Twitterand on his Google+ profile.