Gold price edges lower, dollar holds onto gains

Gold edged lower on the morning of Friday, October 14, in London amid a rising US dollar.

The spot gold price recently traded at $1,255.75/1,256.15 per ounce, down $1.60 on the previous close. Trade has ranged narrowly from $1,254.40 to $1,259.10 so far.

With the US dollar index remaining steady above 97.50, downside pressure on gold will persist for the coming weeks if the metal is unable to break higher out of its current range of $1,250-1,265, Commerzbank said.

The US dollar has been climbing since late September on rising expectations of a US rate hike in December – the index reached a seven-month high of 98.13 on Thursday. It was last up 0.33 percent at 97.87.

Gold has come under pressure in recent weeks as investors worry about the threat of higher interest rates and an end to monetary easing, Daniel Hynes, senior commodity strategist at ANZ Research, said.

“In the short-term, the impending rate hike in the US will remain a headwind. However, once passed, we expect prices to continue their drive towards $1,375 in the first quarter of 2017,” he said.

US data due later includes core retail sales, PPI, retail sales, core PPI, preliminary UoM consumer sentiment, business inventories, and preliminary UoM inflation expectations.

In the other precious metals, silver was unchanged at $17.465/17.485. Platinum at $933/938 was up $6.50 and palladium at $636/644 increased $4.

(Editing by xx)

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