Investing.com -- Gold fell sharply amid a resurgent dollar, as investors await a highly-anticipated appearance from Janet Yellen at next week's monetary policy symposium in Jackson Hole for more clarity on the Federal Reserve's uncertain interest rate outlook.
On the Comex division of the New York Mercantile Exchange, Gold for December delivery traded between $1,342.05 and $1,357.80 an ounce before settling at $1,346.25, down 10.95 or 0.81% on the session. Gold closed relatively flat for the week after failing to post a single move of 1% from the previous day's close in tight, range-bound trade. Since opening the year around $1,075 an ounce, the precious metal has soared approximately 25% over the first seven months of 2016 and is on pace for one of its strongest years in the last three decades.
Gold likely gained support at $1,312.80, the low from July 21 and was met with resistance at $1,374.90, the high from July 6.
Metal traders could be in store for another stretch of cautious, sideways trading next week, ahead of Yellen's appearance in Wyoming at a closely-watched speech next Friday. The comments from the Fed chair could shed light on the U.S. central bank's opaque long-term monetary policy forecast, which has been clouded by diverging views from participants over the last few weeks on the timing of its next rate hike. When the minutes from the Federal Open Market Committee's (FOMC) July meeting were released on Wednesday, some participants felt that it could be appropriate to raise short-term rates in the coming months, while others were more hesitant due to below target inflation. The FOMC's benchmark Federal Funds Rate has remained at a range between 0.25 and 0.50% in each of their five meetings in 2016.
On Friday, Federal Reserve of Dallas president Rob Kaplan said the Fed's decision could be complicated by a low neutral rate, which takes into account the Federal Funds Rate minus a measure of inflation. Kaplan's comments counter a hawkish position laid out by San Francisco Fed president John Williams on Thursday, who warned that delaying an interest rate hike could have detrimental effects for the economy. Earlier this week, New York Fed president William Dudley said the timing could be right to consider raising interest rates again, while St. Louis Fed president James Bullard reiterated a previous stance that the Fed may only need to approve a single rate hike of 25 basis points over the next three years.
Investors who are bullish in gold are in favor of a gradual tightening cycle from the Fed. Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in rising rate environments.
Skeptical of a possible head-fake from the Fed, numerous market players have shrugged off the hawkish minutes this week. As a result, the U.S. Dollar Index fell sharply on Thursday to an intraday low of 94.05, its lowest level in seven weeks. In Friday's session, the index recovered amid heavy profit taking, gaining more than 0.40% to an intraday-high of 94.60. The index, which measures the strength of the greenback versus a basket of six other major currencies, is on pace to halt a five-day losing streak.
Dollar-denominated commodities such as Gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for September delivery fell 0.397 or 2.03% to 19.343 an ounce.
Copper for September delivery inched up 0.001 or 0.02% to 2.168 a pound.