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Gold Prices Flat as Dollar Struggles for Direction

Published 19/10/2018, 09:46
© Reuters.  Gold was flat on Friday.
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Investing.com - Gold prices were flat on Friday as the U.S. dollar was volatile despite expectations of another interest rate increase this year and falling equities.

Comex gold futures for December delivery inched down 0.07% to $1,229.30 a troy ounce as of 4:45 AM ET (8:45 GMT), not far from an earlier session high of $1,232.70.

Rising interest rates are likely remain a concern for gold prices. Interest rate increases ampen appeal for gold, while boosting the dollar.

Gold was also pulled back by an earlier rise in the greenback. Hawkish Federal Reserve meeting minutes increased chances of a rate hike in December, which helped boost the dollar.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, decreased 0.01% to 95.71, but remained near a one-and-a-half week high.

The precious metal 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.

Gold had risen earlier after China reported disappointing third-quarter GDP data. A fall in U.S. and European equities also helped boost the precious metal as investors turned away from riskier assets.

Still, bullion has fallen 10% from its peak in April.

Other metals were higher on the Comex, with silver futures rising 0.11% to $14.620 a troy ounce. Among other precious metals, Platinum Futures increased 0.16% to $833.00 while Palladium Futures surged 0.86% to $1,073.90 an ounce. Copper futures inched up 0.09% to $2.749 a pound.

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