Gold recovers as U.S. dollar rally stalls

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Gold prices rose again on Friday after hitting a three-week low earlier in the week, after a batch of U.S. inflation reports were seen as not alarming enough to force more immediate action from the Federal Reserve.

Price action

  • Gold futures for December delivery gained $8.30, or 0.4%, to $1,941 per ounce.

  • Silver futures for December

    gained 46 cents, or 2%, to $23.46 per ounce.

  • Platinum futures for October

    gained $14.50, or 1.6%, to $925 per ounce, while palladium futures for December rose by $19.70, or 1.6%, to $1,274 per ounce.

  • Copper futures for December

    were off by 0.1% at $3.817 per pound.

Market drivers

Gold is on track to finish this week around where it started as data on U.S. consumer and producer prices affirmed that inflation continued to re-accelerate in August, but not by a wide enough margin to alarm markets and central bankers.

What’s more, in Europe, the European Central Bank signaled that it has likely finished raising interest rates after delivering another 25-basis-point hike on Thursday to lift its deposit rate to 4%.

After marching to its highest level in six months, the U.S. dollar was taking a pause on Friday, which also contributed to gold’s gains, analysts said.

“The slight buoyancy of gold on Friday has also been assisted by a slight weakening in the strength of the US dollar, the currency which gold has an inversely correlated relationship with as the metal is typically priced in dollars,” said Rupert Rowling, a market analyst at Kinesis Money.

The ICE U.S. Dollar Index
a gauge of the buck’s strength against a basket of rivals, was off by 0.1% at 105.31.

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