Gold and other metals futures slumped on Friday, as a move by China to slow lending triggered a rally in the U.S. dollar and a selloff in commodities.
Gold for April delivery, the most actively traded contract, dropped $9.90 U.S., or 0.9%, to $1,084.80 U.S. an ounce in electronic trading on Globex.
A batch of mixed U.S. economic data failed to stem the tide of selling in commodities, with crude oil sliding 2.4% and copper futures off 2%.
While U.S. retail sales rose in January and business inventories were slimmer in December, a survey found consumer more pessimistic about the economy in February.
Heavy selling pressure was seen in Asian trade after the People's Bank of China said it will raise the ratio of reserves banks must set aside by 0.5 percentage points, the second such move this year. Following the news, the U.S. dollar rallied against its major rivals, while stock futures and commodities fell.
China is one of the world's biggest consumers of commodities, so the move to slow down its growth has raised concerns about a decline in its appetite for commodities.
Concerns about Greece's fiscal situation also continued to weigh on gold, as it further pressured the euro and lifted the dollar.
The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.3% to 80.31.
Dollar strength typically weighs on dollar-denominated commodities such as gold and oil, because it makes them more expensive for holders of other currencies.
Also on Globex Friday, March silver futures fell 21 cents to $15.39 U.S. an ounce and March copper futures dropped seven cents, or 2.2%, to $3.06 U.S. a pound.
Gold futures rose 1.7% on Thursday to end at $1,094.70 U.S. an ounce.
Related Stories
