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Gold moves higher but gains capped by strong U.S. dollar

Published 05/13/2016, 02:57 AM
© Reuters.  Gold gains ground ahead of U.S. data
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Investing.com - Gold prices rose on Friday, but gains were limited by a stronger U.S. dollar as investors awaited the release of a number of U.S. economic reports later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.35% at $1,275.80.

The June contract ended Thursday’s session 0.34% lower at $1,271.20 an ounce.

Futures were likely to find support at $1,258.70, the low from May 10 and resistance at $1,286.50, the high from May 9.

Investors were looking ahead to U.S. reports on retail sales, producer prices and consumer sentiment due later in the day, for further indications on the strength of the economy.

On Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 6 increased by 20,000 to 294,000 from the previous week’s total of 274,000. Analysts had expected jobless claims to drop by 4,000 to 270,000 last week.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% at 94.30.

Prices of the yellow metal are up nearly 19% so far this year amid indications the Federal Reserve will take a slow and cautious approach to raising interest rates this year.

Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

Elsewhere in metals trading, silver futures for July delivery rose 0.22% to $17.140 a troy ounce, while copper futures for July delivery added 0.27% to $2.080 a pound.

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