Gold futures slipped for third straight session to end at a more than eight-month low on Friday, with the dollar strengthening against a select band of currencies amid continued speculation that U.S. interest rates will rise at a faster pace once monetary tightening begins.
Gold shed about 1.2 percent for the week.
The precious metal settled at its lowest in over eight months yesterday, with the dollar trending higher after the Federal Reserve’s decision.
On Wednesday, the Federal Reserve slashed its monthly asset purchase to $15 billion and reiterated its pledge to keep interest rates at near-zero for “considerable time” after its bond buying stimulus program ends.
Nevertheless, the Fed, which projected a significant drop in unemployment to below 5 percent by 2017 and forecast inflation to run closer to target levels of around 2 percent, gave hints that tightening may be less gradual once underway.
Gold for December delivery, the most actively traded contract, dropped $10.30 percent or 0.8 percent to settle at $1,216.60 an ounce on the Comex division of the New York Mercantile Exchange on Friday.
Gold for December delivery scaled an intraday high of $1,229.20 and a low of $1,214.60 an ounce.
On Thursday, gold futures ended lower on speculations that U.S. rate hikes will be at a faster pace once the Federal Reserve begins its monetary tightening, with mixed economic data from the U.S. also impacting gold prices.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 784.22 tons on Friday, from its previous close of 788.40 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.73 on Friday, up from its previous close of 84.29 late Thursday in North American trade. The dollar scaled a high of 84.78 intraday and a low of 84.23.
The euro trended lower against the dollar at $1.2840 on Friday, as compared to its previous close of $1.2922 late Thursday in North American trade. The euro scaled a high of $1.2929 intraday and a low of $1.2830.
On the economic front today, a Conference Board report on Friday showed a continued increase by its index of leading U.S. economic indicators in August, although the pace of growth slowdown significantly compared to the previous month. The leading economic index edged up by 0.2 percent in August after showing upwardly revised increases of 1.1 percent and 0.7 percent in July and June, respectively. Economists expected the index to climb by 0.4 percent compared to the 0.9 percent increase originally reported for July.
Eurozone’s current account surplus was largely unchanged from the previous month in July, data from the European Central Bank showed Friday. The current account surplus rose slightly to EUR 18.7 billion from EUR 18.6 billion in June.
The material has been provided by InstaForex Company – www.instaforex.com