Gold Lower After Stronger US Data

Gold edged lower on Friday as the dollar strengthened after signs of increased momentum in the U.S. economy bolstered prospects of higher interest rates.

Bullion was however heading for its first weekly rise in four, capitalising on gains made earlier in the week, when the dollar was weaker and worries increased over the Greek crisis.

Spot gold was down 0.1 percent at $1,180.95 an ounce by 1203 GMT, while U.S. gold futures for August delivery were unchanged at $1,179.30 an ounce .

A stronger dollar, up 0.4 percent against a basket of leading currencies, weighed on gold, making it more expensive for holders of other currencies.

Data on Thursday showed U.S. retail sales surged in May, adding to recent upbeat employment data that suggested the economy was gathering pace after a slow start to the year.

A firming economy could likely prompt the Federal Reserve to raise interest rates in September, which would boost the dollar further, in turn denting demand for non-interest-paying bullion.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza