Metals Stocks: Gold moves lower, but stays on track for a weekly gain

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Markets/commodities reporter

Gold futures moved lower Friday, staying on track to carve out a modest rise for the week, but giving up earlier gains as some upbeat U.S. economic data provided support for the dollar.

December gold GCZ8, -0.45%  fell $4.80, or 0.4%, to $1,203.40 an ounce, with the precious metal on pace to book a weekly rise of about 0.2% after posting losses in each of the last two weeks.

Prices for the bullion had climbed in early trading Friday as the U.S. dollar has slumped by about 0.7% for the week. It dropped to a two-week low on Thursday after a lower-than-expected reading for consumer price inflation. The August consumer-price index rose 0.2%, compared with an expected 0.3% monthly rise, data released Thursday showed.

“Chances of a December interest rate hike by the Federal Reserve have reduced drastically” in the wake of the CPI reading, said Chintan Karnani, chief market analyst at Insignia Consultants. “Inflation is not going to be runaway bride for the [Fed] policy makers.”

Higher interest rates can boost the dollar and dull demand for dollar-denominated commodities. However, as measured by the U.S. ICE Dollar Index DXY, +0.26% a gauge of the buck against a half-dozen currencies, edged up by 0.3% to 94.76 in Friday trade. It is still down about 0.6% for the week.

The buck moved up Friday, pressuring prices for dollar-denominated gold, after data showed that U.S. industrial production rose by a bigger-than-expected 0.4% in August. That was the third monthly increase. Consumer sentiment in September climbed to 100.8 from 96.2 in August.

Earlier data Friday were more downbeat, with retailers in August registering the weakest sales in six months. Retail sales rose just 0.1%.

The U.S. and China trade war will be closely looked at next week, with the Chinese economy seeing some effects from the dispute, said Karnani. Even so, “up to a certain level, slowing Chinese economic growth and slowing global economic growth will be bullish for gold investment demand as people will prefer safe havens. For Asians gold is the safe haven and not the U.S. dollar.”

Elsewhere in metals trading, December silver SIZ8, -0.55% fell nearly 0.6% to $14.165 an ounce. The metal was down less than 0.01% for the week. December copper HGZ8, -0.80%  lost 0.9% to $2.66 a pound, holding onto a rise of roughly 1.4% for the week.

October platinum PLV8, -0.11%  shed almost 0.3% to $801.40 an ounce, paring its weekly gain to 2.7%. December palladium PAZ8, +0.39%  traded at $973.60 an ounce, up 0.5% for the session so far and poised for weekly rise of 0.5%.

The SPDR Gold Trust exchange-traded fund GLD, -0.33%  declined by 0.3%, but was up 0.1% on the week, while the iShare Silver Trust SLV, -0.37%  lost 0.5%, building a weekly loss of 0.3%. The VanEck Vectors Gold Miners ETF traded down 0.7%, cutting its weekly rise to about 0.5%.

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