Gold ticks higher as traders weigh tax-cut prospects, rate hikes
By William Watts, MarketWatch
Dollar strength could continue to pressure yellow metal
Gold futures traded slightly higher on Friday, but was on track for a modest weekly loss, as traders weighed the likelihood of success for Republican tax-cut proposals and continued to factor in expectations for another rate increase by the Federal Reserve before year-end.
Gold for December delivery on Comex was up $2.90, or 0.2%, to $1,291.60 an ounce, while December silver added 3 cents, or 0.1%, to $16.865 an ounce.
For the week, gold was looking a decline of 0.5%, while silver futures were on track for a decline of 0.7%. Over the past three months,however, gold is set for an advance of 3.7%, while silver is looking at a gain of 1.8%.
"With the dollar likely to appreciate further, amid rate hike expectations and optimism over tax reforms, gold remains vulnerable to further losses," said Lukman Otunuga, research analyst at FXTM, in a note
The U.S. dollar and Treasury yields were expected to continue calling the tune for gold. Yields have risen significantly this week as Treasurys sold off, allowing the dollar to gain ground versus major rivals. A stronger dollar can weigh on commodities priced in the currency as it makes them more expensive in other currencies. The ICE Dollar Index , a measure of the U.S. unit against a basket of six major rivals, was flat Friday but on track for a 1% weekly rise.
But some analysts saw room for gold to bounce.