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Gold Prices Fall as U.S. Dollar Rallies

Gold fell on Friday.

Investing.com - Gold prices were lower on Friday after the greenback rallied from an earlier loss.

Comex gold futures for December delivery decreased 0.51% to $1,202.00 a troy ounce as of 11:21 AM ET (15:21 GMT).

Disappointing data on Thursday and Friday increased concern that the Federal Reserve could ease its stance on monetary policy. U.S. retail sales barely registered any gains in August, while consumer prices rose less than expected.

Still, investors are expecting the Fed to raise rates at its policy meeting next week while chances of an increase in December were at 84.2%.

Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.28% to 94.79.

Gold usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Trade tensions remained, as talks over a revised North American Free Trade Agreement (NAFTA) with Canada also made little progress. The Minister of Foreign Affairs of Canada said she would continue talks until at least Monday. Meanwhile, trade talk efforts between the U.S. and China cooled after U.S. President Donald Trump tweeted that the country “was under no pressure to make a deal with China.”

Other metals were mostly down on the Comex, with silver futures falling 0.48% to $14.175 a troy ounce. Among other precious metals, platinum futures inched down 0.17% to $801.90, while palladium futures increased 0.66% to $9725.10 an ounce. Copper futures lost 0.34% to $2.674 a pound.

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