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Gold Futures Top $1,300, Poised for Weekly Gain

October 13, 2017 at 14:10 by Andrew Moran

Gold futures have topped the crucial $1,300 threshold and are on track for their first weekly gain in four weeks. Gold prices are rallying on a weaker US dollar and rising inflation levels, but gains were capped on new retail sales data.

December gold futures rose $7.60, or 0.59%, to $1,304.10 per ounce at 14:00 GMT on Friday. The yellow metal is poised for its first weekly gain in four weeks, advancing about 2% this week.

Silver, the sister commodity to gold, is also rallying to end the trading week. November silver futures climbed $0.10, or 0.58%, to $17.36 an ounce. The white metal is set to record its sixth weekly gain out of the last seven weeks.

Precious metals are making gains on a weaker US dollar as the greenback tumbled 0.40% to finish off the trading week. A weaker US dollar is good for dollar-denominated commodities like gold and silver because it makes it cheaper for foreign investors to purchase.

Inflation levels are inching higher this month. The consumer price index (CPI) gave the annual rate of inflation a boost, hitting 2.2% from 1.9%, which was driven by an increase in energy prices. The core rate remained unchanged at 1.7% for the fifth consecutive month, sitting below the US central bank’s target of 2%.

The rally in metals was capped by a jump in retail sales. In September, retail sales increased 1.6%, the biggest increase in more than two years.

Gold prices had a strong week, stemming from dovish Federal Open Market Committee (FOMC) minutes, a Brookings Institution report that said President Donald Trump could be impeached for “likely obstructing justice,” and a lower US dollar. Although the Federal Reserve is expected to raise interest rates one more time this year, some central bank members argue that it should be delayed because of low inflation levels.

According to the CME Group FedWatch tool, there is an 82% likelihood of a rate hike during December’s FOMC policy meeting.

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