Investing.com - The broadly stronger dollar looks likely to remain a significant headwind for gold this week as the precious metal’s inverse relationship to a firmer dollar continues to outweigh safe haven demand for bullion.
With another fairly light week ahead on the economic calendar, investors will continue to monitor developments on trade and Turkey. Wednesday’s U.S retail sales report will be eyed, amid expectations for an increase in July from the previous month.
Gold futures ended Friday with a loss for both the day and the week as a rally in the dollar amid fears over contagion effects from a currency crisis in Turkey weighed.
Gold futures for December delivery settled down 0.06% at $1,219.20 on the Comex division of the New York Mercantile Exchange. The precious metal ended the week down 0.26%, its fifth consecutive weekly loss.
The dollar rallied to its highest level in more than a year against a currency basket on Friday, as a selloff in the Turkish lira spurred a flight to safety amid fears over contagion effects, particularly on European banks exposed to the Turkish currency.
Turkey’s currency plunged to its lowest level in a year against the dollar after U.S. President Donald Trump escalated a feud with Ankara by doubling tariffs on metals imports.
The lira had already come under heavy selling pressure amid concerns over President Tayyip Erdogan's influence over monetary policy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, surged 0.76% to 96.19 late Friday, the most since June 27, 2017. The index gained 1.33% for the week.
A stronger U.S. currency makes gold and other dollar-denominated commodities more expensive for foreign investors.
Gold prices are down around 6.7% so far this year, pressured lower by the stronger dollar and rising interest rates. Investors have also shunned the precious metal despite an escalation in global trade tensions, indicating that gold may be losing its safe haven status.
Elsewhere in precious metals trading, silver settled down 1.02% at $15.305 a troy ounce, for a weekly loss of 0.91%. Platinum settled at $828.80, 0.64% lower for the day, to end the week 0.44% lower.
Among base metals, copper ended at $2.745, down 0.74% for the day, extending its weekly loss to 0.76%.
Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.
Monday, August 13
The U.S. is to release data on mortgage delinquencies.
Tuesday, August 14
Australia is to release data on business confidence.
China is to publish a report on fixed asset investment and industrial production.
The UK is to publish its latest employment report.
The euro zone is to release a preliminary estimate of second quarter economic growth.
The ZEW Institute is to report on German economic sentiment.
Wednesday, August 15
Australia is to publish figures on the wage price index.
The UK is to release inflation data.
The U.S. is to produce data on retail sales, along with reports on industrial production, labor costs and manufacturing activity in the New York region.
Thursday, August 16
Australia is to publish its latest employment report.
The UK is to report on retail sales.
Canada is to publish figures on manufacturing sales.
The U.S. is to release reports on building permits, housing starts, jobless claims and manufacturing activity in the Philadelphia region.
Friday, August 17
The euro area is to release revised inflation data.
Canada is to produce its latest report on consumer price inflation.
The U.S. is to round up the week with preliminary data on consumer sentiment.