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Gold Declines on Black Friday, Poised for a Weekly Loss

November 24, 2017 at 16:18 by Andrew Moran

Gold futures are in the red to complete the trading week as investors head to US stocks on Black Friday. Following a disappointing week for the yellow metal, gold prices are poised for a weekly loss.

December gold futures tumbled $3.70, or 0.29%, to $1,288.50 per ounce at 15:03 GMT on Friday. Gold prices are on track for a weekly decline of about 0.5%. Year-to-date, gold has advanced more than 10%.

Silver, the sister commodity to gold, is also slipping to end the trading week. December silver futures fell $0.08, or 0.48%, to $17.03 an ounce. The white metal will post a weekly drop of 1.2%.

The US dollar slid 0.41% on Friday, but the precious metals are unable to take advantage of a weaker greenback, which is good for commodities because it makes it cheaper for foreign investors to buy. The US dollar has shed roughly 9% of its value year-to-date.

Investors are pouring into US stocks on Black Friday as many retail shares are climbing, making gold less attractive. It appears that investors were taking profits in gold and selling off the precious metal.

Gold prices did inch higher on Wednesday after minutes from the Federal Reserve’s November Federal Open Market Committee (FOMC) were disseminated. The US central bank hinted that it may not be as fierce in raising interest rates in 2018 as many investors were anticipating. The financial markets have already priced in a December rate hike, but traders are unaware if the Fed will raise rates three times next year as policymakers suggested throughout 2017.

Gold is generally sensitive to a rising-rate environment because it lifts the opportunity cost and sends traders into yield-bearing assets.

According to Reuters, physical gold purchases were lower in primary Asian markets, but analysts say that seasonal demand will give a boost to sales numbers in China next month.

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