Gold prices headed higher on Friday, but stayed on track to suffer a loss for the month of September, as the benchmark U.S. dollar index continued to strengthen.
The yellow metal had markedly dropped a day earlier as the dollar index deepened its advance, seen after theFederal Reserve this week lifted federal-funds rates for the third time this year and signaled it was prepared to increase again in December. The ICE U.S. dollar index
DXY, +0.05%
was up 0.3% Friday and headed for 0.6% third quarter gain.
“Gold has been trading in a rather good range after dropping to fresh one-month lows on the stronger [U.S.] dollar narrative,” said Stephen Innes, head of trading at Oanda, in emailed comments.
“But frankly, the market is so oversold that we should expect consolidation to set in before the next leg lower,” he said. “We’re in the domain of the ‘gold bears’ who have August $1,160 lows in their crosshairs.”
December gold
GCZ8, +0.63%
tacked on $6.60, or 0.6%, to $1,194 an ounce. The contract had settled at a six-week low on Thursday. Prices, based on the most-active contracts, were down 0.6% for the week and down 1% for the month, poised for a quarterly loss of roughly 4.8%, FactSet data show.
Gold is sensitive to higher Fed rate increase because they push up U.S. bond yields, which can reduce the attraction of nonyielding bullion, and tend to boost the dollar, which makes gold more expensive for buyers using other currencies.
Outpacing the rise in gold, December silver
SIZ8, +2.80%
jumped up by 40 cents, or 2.8%, to $14.69 an ounce. Prices, based on the front-month contracts, were up 2.3% for the week, 0.9% higher for the month, but looking at a 9.3% September drop.
December copper
HGZ8, +0.79%
rose 1% to $2.812 a pound and January platinum
PLF9, +1.35%
added 1.1% to $824 an ounce. December palladium
PLZ8, +0.82%
rose 0.4% at $1,075.40 an ounce, ready to mark its 13th session gain in a row. It continues to stand at its highest prices since January, buoyed by expectations for record automotive demand for palladium this year.
The popular SPDR Gold Trust
GLD, +0.71%
added 0.3%, while the iShares Silver Trust
SLV, +2.91%
rose 2.4%. The VanEck Vectors Gold Miners ETF
GDX, +1.50%
climbed 1.2%.
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Source : MTV
