Gold Trades Lower After FOMC Stays on Target for December

Precious metals prices dropped Friday and headed for a weekly loss, nicked by a firmer dollar that’s been bolstered by the Federal Reserve’s adherence to an interest rate-tightening cycle.

Sharp losses for stocks for the session and the week, which are in part tracking the plunge into a bear market for oil, could limit gold’s downside should risk-off sentiment generate refreshed interest in the haven metal.

December gold GCZ8, -1.14% eased $5.80, or 0.5%, at $1,219.40 an ounce, down over 1% for the week. December silver SIZ8, -1.86% fell 11 cents, or 0.8%, to $14.305 an ounce, and has fallen nearly 3% for the week.

Gold suffered a fourth loss in five sessions on Thursday, then struggled for direction in electronic trading with the U.S. dollar extending gains once the latest policy update from the Federal Reserve signaled a central bank still on a tightening course for later this year and early next.

“Solid Fed conviction to raise interest rates in December was plain in [Thursday’s] announcement. Higher real interest rates, based on the Fed comments, and a slightly stronger U.S. dollar maintained pressure on gold prices,” said Rob Haworth, senior investment strategist at U.S. Bank.

via MarketWatch

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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