Gold Prices Climb Higher As Dollar Weakens

Gold prices moved higher on Friday, earning the most active gold futures contract their second straight weekly gain, as the dollar shed ground.

Despite some hawkish comments from a few Fed officials, there are expectations the central bank will start reducing rates beginning in the second quarter of 2024.

The dollar index dropped to 103.40, losing about 0.5%.

Gold futures for December ended higher by $10.20 at $2,003.00 an ounce.

Silver futures for December ended up $0.653 at $24.341 an ounce, while Copper futures for December settled at $3.7890 per pound, up $0.0260 from the previous close.

The euro strengthened and regional bond yields edged higher after Bundesbank President Joachim Nagel said the European Central Bank must resist any temptation to cut interest rates early.

Nagel also said he was “skeptical” about the risk of a “hard landing” for the euro zone economy caused by the monetary policy squeeze.

Elsewhere, the Bank of England’s chief economist Huw Pill told the Financial Times that it was too early to declare victory in the battle against high inflation.

The Commerce Department’s report on personal income and spending may be in the spotlight next week, as it includes readings on inflation said to be preferred by the Federal Reserve.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, may also attract attention next week along with remarks by Fed Chair Jerome Powell.

Traders will be looking for additional clues about the outlook for interest rates, with optimism the Fed is done raising rates contributing to recent strength on Wall Street.

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