Gold Futures Settle Lower Despite Weak Dollar

Despite the dollar’s weakness amid easing concerns about interest rates, gold futures failed to hold early gains and settled lower on Friday.

The dollar index dropped to 103.95, losing nearly 0.4%, amid speculation the Federal Reserve might announce a rate cut in the first half of 2024.

Data showing softer than expected increase in inflation has reinforced investors’ expectations that the Federal Reserve will refrain from raising interest rates over the next several months before cutting rates in mid-2024.

The Fed’s next monetary policy meeting is scheduled for December 12-13, with CME Group’s FedWatch Tool currently indicating a 99.8% chance the central bank will leave rates unchanged.

Still, some economists are of the view that the central bank will maintain a somewhat hawkish tone to avoid the appearance of declaring victory over inflation too soon.

Gold futures for December ended down $2.60 at $1,984.70 an ounce, off the day’s high of $1,996.40. Gold futures gained more than 2% in the week, their first weekly gain in three weeks.

Silver futures for December ended lower by $0.081 at $23.852 an ounce, while Copper futures for December settled at $3.7385 per pound, gaining $0.0360.

In U.S. economic news today, a report from the Commerce Department said housing starts in the U.S. jumped by 1.9% to an annual rate of 1.372 million in October after surging by 3.1% to a downwardly revised rate of 1.346 million in September.

Economists had expected housing starts to dip to a rate of 1.350 million from the 1.358 million originally reported for the previous month.

The Commerce Department said building permits also shot up by 1.1% to an annual rate of 1.487 million in October after plunging by 4.5% to a revised rate of 1.471 million in September.

Building permits, an indicator of future housing demand, were expected to decrease to a rate of 1.450 million from the 1.475 million originally reported for the previous month.

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