Gold price down on Fed commentsand stronger US dollar
New York (Sept 10) Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday on Fed comments and a stronger U.S. dollar.
The most active gold contract for December delivery fell 7.1 U.S. dollars, or 0.53 percent, to settle at 1,334.5 dollars per ounce.
The precious metal was put under pressure as Boston Fed President Eric Rosengren told the South Shore Chamber of Commerce in Quincy, Massachusetts, USA, that he believed that commercial real estate prices had risen quite rapidly, indicating signs of inflation within the U.S. economy. One of the goals of the U.S. Federal Reserve is to control inflation, in addition to its main priority of managing unemployment.
Gold was put under further pressure as the U.S. Dollar Index rose by 0.5 percent to 95.46 as of 1715 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
On Monday of next week, several Fed officials are expected to speak, and Thursday will see the release of several key economic indicators including the weekly jobless claims, the producer price index, retail sales, and industrial production reports. The consumer price index will also be released on Friday.
Although these figures are likely to be altered following the Monday speeches, current expectations are that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.
According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 24 percent at the September 2016 meeting, 27 percent at the November 2016 meeting, and 58 percent at the December meeting.
Silver for December delivery dropped 31 cents, or 1.58 percent, to close at 19.368 dollars per ounce. Platinum for October delivery fell 17.2 dollars, or 1.59 percent, to close at 1,067.5 dollars per ounce.