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Gold Falls, Poised for a Weekly Loss on Rallying Greenback

December 14, 2018 at 15:47 by Andrew Moran

Gold futures are tumbling to finish off the trading week, leading to a weekly loss for the yellow metal. Gold prices are taking a hit because of a rallying US dollar, but their losses were capped on lower expectations that the US central bank will move ahead with its planned increases to interest rates next year.

February gold futures slipped $8.70, or 0.7%, to $1,238.70 per ounce. Gold is on track for a weekly decline of about 1.2%, bringing its year-to-date losses to 7.5%. After peaking in April, the precious metal has plunged and will close 2018 in the red, snapping its two-year winning streak.

Silver, the sister commodity to gold, is also edging lower at the end of the trading week. March silver futures plummeted $0.26, or 1.75%, to $14.595 per ounce. The white metal will record a weekly drop of 0.7%, leading to a 2018 decrease of 13%.

Precious metals are getting clobbered on a strengthening US dollar as the greenback surged 0.53% to 97.60. It is set for a weekly jump of roughly 1.1%. A stronger buck is bad for dollar-pegged commodities because it makes it more expensive for foreign investors to purchase. The currency will post a 2018 spike of 6%.

This year, investors have poured into the dollar, using the currency as a safe-haven instrument. Despite the US engaged in a bitter trade dispute with China, traders have propped up the buck and sent confidence signals throughout the global financial markets.

But gold may find momentum in a dovish Federal Reserve as the market does not anticipate the Eccles Building will keep up with its planned rate hikes next year. While the Federal Open Market Committee (FOMC) is poised to raise rates next week for the fourth time this year, recent remarks and economic data suggest that the Fed will take a less aggressive approach in 2019.

In other metal commodities, January copper futures shed $0.015, or 0.55%, to $2.75 a pound. January platinum futures dropped $9.50, or 1.19%, to $788.00 an ounce. January palladium futures cratered $27.70, or 2.33%, to $1,163.00 per ounce.

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