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Gold drops to 2-week low

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The gold selloff resumed on Friday, with the metal falling to a two-week low as the dollar rallied on news that the Republican-controlled Senate has passed a budget blueprint.

Gold for December delivery GCZ7, -0.62%  lost $8.20, or 0.6%, to $1,281 an ounce, setting it on track for its lowest settlement since Oct. 6 and a 1.8% weekly drop. That would be mark the worst week since Sept. 22, according to FactSet data.

Silver for December SIZ7, -0.87%  lost 0.8% to $17.11 an ounce, putting it on track for a 1.7% weekly loss.

The metals’ prices have been hurt this week by a rising dollar, which has received a boost from rising expectations that interest rates will go up in December.

On Friday, the greenback continued its path higher, after the Republican-controlled Senate approved a budget proposal for the next fiscal year. The late-night 51-49 vote is seen as clearing a path for U.S. President Donald Trump to reach his goal of reforming the tax code and introducing tax cuts, seen as positive for the dollar.

Higher interest rates dull the appeal of nonyielding metals, in favor of interest-bearing assets, making gold less attractive. Additionally, a stronger greenback tends to hurt dollar-denominated commodities, because they then become more expensive for holders of other currencies.

On Thursday, however, markets ignored the outlook for higher rates and instead focused on the political drama in Spain, which helped gold snap a three-session losing streak. The central government in Madrid is expected at an emergency meeting on Saturday to approve measures to suspend Catalonia’s autonomy after the Catalan president, Carles Puigdemont, threatened to declare independence for the region.

In other metals on Friday, copper HGZ7, +0.95%  rallied 0.8% to $3.19 per pound, while PAZ7, +1.16%  gained 1% to $961.95 an ounce. Platinum PLF8, -0.37%  traded 0.4% lower at $922.50 an ounce.

Source:marketwatch.com

The gold selloff resumed on Friday, with the metal falling to a two-week low as the dollar rallied on news that the Republican-controlled Senate has passed a budget blueprint.

Gold for December delivery GCZ7, -0.62%  lost $8.20, or 0.6%, to $1,281 an ounce, setting it on track for its lowest settlement since Oct. 6 and a 1.8% weekly drop. That would be mark the worst week since Sept. 22, according to FactSet data.

Silver for December SIZ7, -0.87%  lost 0.8% to $17.11 an ounce, putting it on track for a 1.7% weekly loss.

The metals’ prices have been hurt this week by a rising dollar, which has received a boost from rising expectations that interest rates will go up in December.

On Friday, the greenback continued its path higher, after the Republican-controlled Senate approved a budget proposal for the next fiscal year. The late-night 51-49 vote is seen as clearing a path for U.S. President Donald Trump to reach his goal of reforming the tax code and introducing tax cuts, seen as positive for the dollar.

Higher interest rates dull the appeal of nonyielding metals, in favor of interest-bearing assets, making gold less attractive. Additionally, a stronger greenback tends to hurt dollar-denominated commodities, because they then become more expensive for holders of other currencies.

On Thursday, however, markets ignored the outlook for higher rates and instead focused on the political drama in Spain, which helped gold snap a three-session losing streak. The central government in Madrid is expected at an emergency meeting on Saturday to approve measures to suspend Catalonia’s autonomy after the Catalan president, Carles Puigdemont, threatened to declare independence for the region.

In other metals on Friday, copper HGZ7, +0.95%  rallied 0.8% to $3.19 per pound, while PAZ7, +1.16%  gained 1% to $961.95 an ounce. Platinum PLF8, -0.37%  traded 0.4% lower at $922.50 an ounce.

Source:marketwatch.com

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