Gold plummets on dollar strength, firm for a monthly
ADECLINE IN GOLD futures Friday, on the back of further strength in the dollar, pushed the metal down for the week, but prices were still on track to tally a second straight monthly gain.
Gold for February delivery, -0.37 percent shed $6.60 at $1,223.80 an ounce, with the contract on track to register a weekly fall of 0.4 percent, based on last Friday’s settlement. It was up nearly 0.3 percent for November.
Prices had weakened in electronic trading late Thursday, shortly after minutes from the Federal Open Market Committee’s November monetary policy meeting revealed that every member of the committee was on board with lifting interest rates fairly soon.
The account of the most recent gathering of U.S. monetary-policy makers helped to stabilize the dollar, signaling that a rate increase in December was on track, even if speeches from central bankers suggest that the rate-hike path forward in 2019 may be less certain.
On Friday, the dollar index was up 0.4 percent at 97.169. A stronger dollar typically weakens investment demand for dollar-priced commodities, like gold. The buck was up 0.3 percent this week, but barely poised for a gain in November, according to data.
Despite bullion’s recent lackluster trading, some investors maintain a relatively sanguine outlook for gold in the first quarter of 2019.
“We are bearish on gold in the short term, but bullish on its prospects in [the first quarter of] 2019,” Mark O’Byrne, research director at GoldCore said in a monitored report, noting “there are some very real risks which look likely to impact risk assets and should see the return of safe haven gold demand.”
Many investors are maintaining a fairly bearish outlook for the U.S. economy, overall.