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Gold prices slip lower on stronger U.S. dollar

Published 10/21/2016, 03:03 AM
Updated 10/21/2016, 03:03 AM
Gold prices move lower as greenback hovers at 7-month peak

Investing.com - Gold prices slipped lower on Friday, as a stronger U.S. dollar weighed on the precious metal, although the European Central Bank’s latest policy decision lent some support.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.28% at $1,264.05.

The December contract ended Thursday’s session 0.19% lower at $1,267.50 an ounce.

Futures were likely to find support at $1,249.90, the low from October 17 and resistance at $1,270.50, Thursday’s high.

Gold prices remained under pressure as expectations for a U.S. rate hike before the end of the year continued to lend broad support to the greenback.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at a fresh seven-month high of 98.42.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The precious metal had briefly strengthened after ECB President Mario Draghi said on Thursday that an adjustment to the bank’s stimulus program could come in December, saying its assessment would benefit from new economic projections to be drawn up by ECB forecasters.

The comments came after the ECB left interest rates unchanged at record lows of zero earlier Thursday and kept the deposit facility rate at -0.4%.

Elsewhere in metals trading, silver futures for December delivery slid 0.38% to $17.837 a troy ounce, while copper futures for December delivery held steady at $2.096 a pound.

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