Gold futures dropped toward $1,300 U.S. an ounce on Friday, ready for a loss of more than 3% for the week as the U.S. dollar rallied against the euro on speculation that low euro-zone inflation may prompt the European Central Bank to lower interest rates.
Gold for December delivery dropped $16.70, or 1.3%, to $1,307 U.S. an ounce on the Comex division of the New York Mercantile Exchange. Tracking the most-active contracts, prices were poised for a loss of more than 3% for the week and a settlement at the lowest level since Oct. 16.
Prices fell nearly 2% on Thursday after the Federal Reserve — in a statement Wednesday — maintained the pace of bond-buying, but kept tapering plans on the table. For the month of October, gold prices fell 0.3%.
December silver was down two cents, or 0.1%, at $21.85 U.S. an ounce Friday, trading down about 3.5% for the week after ending the month of October with a gain of 0.7%.
The U.S. dollar on Friday rallied against other major currencies, especially the euro, making dollar-denominated commodities such as gold more expensive for holders of other currencies.
The dollar index rose to 80.752 from 80.221 late Thursday, while the euro dropped to $1.3486 from $1.3587 U.S.. Data Thursday showed inflation in the euro-zone fell to the lowest level in almost four years in October, fueling speculation that the European Central Bank will cut interest rates.
Also Friday, gold prices fell even further after the Institute for Supply Management’s manufacturing index showed a climb to 56.4% in October. That was the highest reading since April 2011.
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