Gold price bounces back as dollar falls on US shutdown concerns

New York (Jan 19)  Gold prices rose Friday, lifted as the dollar stepped back on concerns over a potential shutdown of the U.S. government, and helping the precious metal partially rebound from the biggest one-day fall in a month.

February gold GCG8, +0.47%  rose $8.20, or 0.6%, to $1,335.50 an ounce. On Thursday, gold dropped $12 to settle at $1,327.20 an ounce, the biggest single-session dollar and percentage fall since Dec. 7, according to FactSet data. For the week, gold is looking at almost no change, given the swings seen this week.

On Wednesday, the contract settled at its highest level since Sept. 8.

Lifting gold was fresh losses for the U.S. dollar, with the ICE U.S. Dollar Index DXY, -0.03%  , which measures the buck against a basket of six rivals, down 0.3% to 90.243, around its lowest level in three years. The dollar fell as traders fretted over the possible government shutdown this weekend.

Gold, which is priced in dollars, often trades inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of the precious metal to holders of other currencies.

The House on Thursday passed a one-month spending bill that would keep the government funded through Feb. 16. But the stopgap measure lacks support to clear the Senate and the current interim funding bill expires at 12:01 a.m. Eastern Time on Saturday.

Opinion: If politicians can’t pass a budget, what makes them think they can do the hard stuff?

The only data on tap for Friday is consumer sentiment for January, due at 10 a.m. Eastern. But two Federal Reserve speakers are set to speak. Atlanta Fed President Raphael Bostic is due to take part in a moderated discussion about the economy at Nashville regional Fed branch at 8:15 a.m. Eastern. Fed Vice Chair Randall Quarles will speak about bank regulation at the American Bar Association in Washington at 1 p.m. Eastern.

Rounding out action in the metals, March silver SIH8, +0.45% rose 14 cents, or 0.8%, to $17.096 an ounce, while copper HGH8, +0.50%  for the same month rose 0.7% to $3.221 a pound.

March palladium PAH8, +1.17%  rose 1.2% to $1,106.40 an ounce. April platinum PLJ8, +0.88% gained nearly 1% to $1,016.90 an ounce.

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