MW: Gold rises further as GDP revision hits dollar
NEW YORK (MarketWatch) -- Gold futures continued their rally early Tuesday, as a downward revision of third-quarter U.S. economic growth did little to diminish expectations the Federal Reserve will keep interest rates low, keeping the dollar under pressure and lifting the appeal of gold as a safe haven.
Later in the session, minutes from the Fed's last monetary policy meeting will be parsed for nuances on when central bankers might begin to remove some of the extra-ordinary stimulus measures adopted to prevent the financial system and the economy from sinking this year.
Gold for December delivery, the most actively traded contract, rose $3.10, or 0.3%, to $1,167.80 an ounce in electronic trade on Comex.
On Monday, gold climbed to a new record of $1,174 an ounce, after St. Louis Fed President James Bullard said the central bank should continue buying mortgage-backed securities and other assets longer than currently planned.
The comments led the dollar to sink near 14-month lows against the euro, while lifting stocks and commodities, such as crude oil and gold. Gold in particular has been used as a hedge against a weakening dollar.
On Tuesday, the euro traded at $1.4955 little changed on the day, after nearing the key $1.50, which it briefly topped in October for the first time since August of last year.
The dollar index (DXY 75.16, +0.07, +0.09%) , which tracks the performance of the greenback against a basket of other major currencies, was little changed at 75.171 in recent trading.
The dollar and gold showed little immediate reaction after the U.S. government revised its estimate of growth in the third quarter down to 2.8% from the 3.5% originally reported, matching economists' expectations.
U.S. stocks were under early pressure, with the Dow industrials (INDU 10,377, -73.54, -0.70%) off 0.5% and the S&P 500 index (SPX 1,100, -6.06, -0.55%) down 0.4%. Overnight, the Shanghai Composite slumped 3.5% as China's banking regulator warned the nation's lenders to strictly comply with capital requirements or face sanctions.
Holdings in SPDR Gold Shares (GLD 114.33, +0.04, +0.04%) , the biggest gold exchange-traded fund, stood at 1,121.46 metric tons, up nearly 4 metric tons from 1,117.49 on Friday.
