Gold falls over one percent as dollar firms

By Renita D. Young and Zandi Shabalala NEW YORK/LONDON (Reuters) - Gold prices fell more than 1 percent on Friday as the dollar firmed against the British sterling and the euro after British Prime Minister Theresa May said the European Union must supply an alternative Brexit proposal. China's moves to boost domestic consumption also helped bolster the dollar rally driven by investor bets that the latest U.S.-China trade salvoes were unlikely to dent global growth.

Reuters September 22, 2018 00:05:56 IST
Gold falls over one percent as dollar firms

Gold falls over one percent as dollar firms

By Renita D. Young and Zandi Shabalala

NEW YORK/LONDON (Reuters) - Gold prices fell more than 1 percent on Friday as the dollar firmed against the British sterling and the euro after British Prime Minister Theresa May said the European Union must supply an alternative Brexit proposal.

China's moves to boost domestic consumption also helped bolster the dollar rally driven by investor bets that the latest U.S.-China trade salvoes were unlikely to dent global growth. The dollar's status as the chief reserve currency makes it the prime beneficiary of U.S.-China trade conflict, with the United States seen as having less to lose.

"A big selloff in the pound and euro sent the dollar sharply higher. And gold, being dollar-denominated, fell as a result of that," said FOREX.com analyst Fawad Razaqzada.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Spot gold lost 0.8 percent at $1,196.86 per ounce by 1:35 p.m. EDT (1735 GMT). During the session it touched its lowest since Sept 11 at $1,191.51. However, gold headed for a 0.4 percent weekly increase.

U.S. gold futures for December delivery settled down $10, or 0.8 percent, at $1,201.30 per ounce.

The euro and the pound fell after British Prime Minister Theresa May said the European Union must come up with an alternative to her Brexit proposals, saying talks had reached an impasse after the bloc's leaders rejected her plans without explaining why.

Investors await next week's Federal Reserve meeting, where the U.S. central bank is widely expected to raise benchmark interest rates. Higher U.S. interest rates tend to make gold less attractive since it does not pay interest and costs money to store and insure.

In other precious metals, spot silver rose 0.1 percent at $14.29 an ounce, after rising to two-week highs of $14.43.

"The factors driving silver are much more industrial-related," said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments' ETF Securities.

Silver is closing the week up about 2 percent.

Palladium touched its highest since April 19 at $1,056.72 per ounce before retracing gains to trade about flat on the day but with a weekly rise of more than 7 percent, the biggest weekly percentage gain since April.

Platinum fell 0.4 percent at $828.70 after hitting its highest since Aug. 9 at $838.40. The metal is closing the week more than 4 percent higher, the strongest weekly gain since January.

(Additional reporting by Nallur Sethuraman in Bengaluru; editing by Kirsten Donovan and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.