Gold falls over 1% as greenback firms; industrial factors boost silver

NEW YORK/LONDON — Gold prices fell more than one percent on Friday as the dollar firmed against the British sterling and the euro after British Prime Minister Theresa May said the European Union (EU) must supply an alternative Brexit proposal.

China’s moves to boost domestic consumption also helped bolster the dollar rally driven by investor bets that the latest USChina trade salvoes were unlikely to dent global growth. The greenback’s status as the chief reserve currency makes it the prime beneficiary of US-China trade conflict, with the US seen as having less to lose.

“A big sell-off in the pound and euro sent the dollar sharply higher. And gold, being dollardenominated, fell as a result of that,” said FOREX.com analyst Fawad Razaqzada.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Spot gold lost 0.8% at $1,196.86 per ounce by 1:35 p.m. EDT (1735 GMT). During the session it touched its lowest since Sept 11 at $1,191.51. However, gold headed for a 0.4% weekly increase.

US gold futures for December delivery settled down $10 or 0.8% at $1,201.30 per ounce.

The euro and the pound fell after British Prime Minister Theresa May said the EUJ must come up with an alternative to her Brexit proposals, saying talks had reached an impasse after the bloc’s leaders rejected her plans without explaining why.

Investors await this week’s Federal Reserve meeting, where the US central bank is widely expected to raise benchmark interest rates. Higher US interest rates tend to make gold less attractive since it does not pay interest and costs money to store and insure.

In other precious metals, spot silver rose 0.1% at $14.29 an ounce, after rising to a two-weekhigh $14.43. Silver was closing last week up about two percent. “The factors driving silver are much more industrial-related,” said Maxwell Gold, investment strategy director at Aberdeen Standard Investments’ ETF Securities.

Palladium touched its highest since April 19 at $1,056.72 per ounce before retracing gains to trade about flat on the day but with a weekly rise of more than 7%, the biggest weekly percentage gain since April. Platinum fell 0.4% at $828.70 after hitting its highest since Aug. 9 at $838.40. The metal was closing the week more than four percent higher, the strongest weekly gain since January. —