Gold Futures Settle Higher As Dollar Loses Ground

Gold prices climbed higher on Friday, as the dollar came further off a 20-year high touched a couple of sessions ago.

The dollar index dropped to a low of 108.36 in the Asian session, and despite recovering fairly well, continues to languish in negative territory at 108.90, down 0.74% from the previous close.

Gold futures for December ended higher by $8.40 or about 0.5% at $1,728.60 an ounce. Gold futures gained about 0.4% in the week.

Silver futures for December ended up by $0.325 at $18.767 an ounce, while Copper futures for December settled at $3.5680 per pound, gaining $0.0410.

After Fed Chair Jerome Powell delivered an uncharacteristically strong message on Thursday about how the Fed plans to combat entrenched inflation, U.S. interest rate are now almost certain to go up by 75 bps at the September 20-21 Fed meeting.

The European Central Bank (ECB) raised interest rates by a record 75 basis points on Thursday and signaled further hikes to tame runaway inflation.

The ECB must raise interest rates further to prevent record euro-zone inflation from spilling over into wages, Governing Council member Klaas Knot said.

Separately, Slovakia’s Peter Kazimir called for “resolute hikes” to tackle “painfully” high inflation.

A report released by the Commerce Department showed wholesale inventories in the U.S. increased by less than expected in the month of July.

The report showed wholesale inventories rose by 0.6% in July after surging by 1.8% in June. Economists had expected wholesale inventories to climb by 0.8%.

The smaller than expected advance in wholesale inventories came as a 1% jump in inventories of durable goods was partly offset by a 0.1% dip in inventories of non-durable goods.

Meanwhile, the Commerce Department said wholesale sales tumbled by 1.4% in July after leaping by 1.6% in June.

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