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Gold Poised for Weekly Decline, November Gain As Dollar Rallies

November 30, 2018 at 16:11 by Andrew Moran

Gold is on track to record a weekly decline, but it is poised for a commendable monthly gain. Gold futures are tumbling to end the trading week as investors brace for an important meeting between President Donald Trump and Chinese President Xi Jinping at the G20 summit this weekend.

February gold futures shed $7.30, or 0.59%, to $1,223.10 per ounce at 14:39 GMT on Friday, extending the four-session losing streak. The yellow metal is set to post a 0.5% weekly drop, but it will report a November gain of 0.5%, despite immense volatility in the metals market in the last month.

Silver, the sister commodity to gold, is also in the red to finish off the trading week. March silver futures fell $0.25, or 1.75%, to $14.15 an ounce. The white metal has added 0.5% over the past trading week, but it has dipped 0.2% in November.

Investors are reacting to the November Federal Open Market Committee (FOMC) minutes, which showed that every member supported raising interest rates “fairly soon.” This was bullish for the greenback because it signaled that the central bank will pull the trigger on a December rate hike, and potentially the three planned rate hikes in 2019. But it is bad news for precious metals because a rising-rate environment lifts the opportunity cost and sends traders into yield-bearing assets.

The US dollar climbed 0.37% to 97.15, bringing its weekly gain to 0.25% and monthly advance to 0.6%. A stronger buck is bad for dollar-pegged commodities because it makes it more expensive for foreign investors to purchase.

The market will keep a close eye on the Trump-Xi meeting that may offer some hints as to how long the US-China trade dispute will linger on. Earlier this week, when it was reported that Peter Navarro would attend the meeting, stock indexes plunged.

In other metal markets, March copper futures dipped $0.005, or 0.21%, to $2.78 per pound. January platinum futures cratered $16.30, or 1.99%, to $804.60 per ounce. January palladium futures slid $1.80, or 0.16%, to $1,149.60 an ounce.

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