Investing.com – Gold prices continued to edge higher on Friday as both a falling dollar and US Treasury yields lifted sentiment on the precious metal.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $12.20, or 0.96%, to $1,309.60 troy ounce.
Gold futures rose to two-and-a-half month highs on Friday as the precious metal looked to end the year on a bullish note, taking advantage of a slump in both the dollar and US yields.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.51% to 91.87.
Gold is on track to notch its best year since 2010 despite growing expectations that the Federal Reserve could adopt a more aggressive monetary policy tightening than markets currently price in.
"I think four times is likely given the juice from the tax cuts," said Mark Zandi, chief economist at Moody's Analytics. "That'll push unemployment below 4 percent and put a lot of pressure on the Fed to normalize rates much more quickly."
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
In other precious metal trade, silver futures rose 1.08% to $17.10 a troy ounce, while platinum futures gained 0.59% to $937.
Copper traded at $3.29, down 0.35%, while natural gas rose 1.72% to $2.96. Natural gas prices continued to add to gains despite data Thursday showing U.S. natural gas supplies in storage declined slight less-than-expected last week.