Press "Enter" to skip to content

Gold Prices Fall amid Inflation Concerns

© Reuters. Gold prices were down on Friday.© Reuters. Gold prices were down on Friday. – Gold prices slumped on Friday as inflation data pointed to a steady interest rate increase by the Federal Reserve.

Comex for December delivery fell 1.17% to $1,211.90 a troy ounce as of 11:11 AM ET (16:11 GMT).

The producer price index (PPI) increased 0.6% in October. The higher-than-expected numbers support the Fed’s gradual rate increase policy, which helped boost the greenback. The Fed held interest rates steady on Thursday, as expected, but remained on track to continue gradually tightening.

The central bank hiked U.S. interest rates three times this year and is widely expected to do so again in December.

Interest rate increases dampen appeal for gold, while boosting the dollar.

The , which measures the greenback’s strength against a basket of six major currencies, inched up 0.05% to 96.60.

The precious metal usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Meanwhile weak economic global growth worried investors as producer prices in China fell for the fourth-straight month, raising more concerns that the world’s second-largest economy is struggling as it battles the U.S. in a trade war.

Chinese President Xi Jinping said on Thursday, ahead of a meeting with his U.S. counterpart Donald Trump, that Beijing wants to resolve problems with the U.S. through talks but Trump must respect China’s choice of development path and interests.

Other metals were lower on the Comex, with falling 2.67% to $14.135 a troy ounce. Among other precious metals, platinum decreased 1.45% to $857.70 while palladium dipped 1.52% to $1,099.10 an ounce. futures slumped 1.50% to $2.696 a pound.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.