Late Friday morning, lightly-traded but nearby December gold was down $14.80 U.S. to $1,110.90 U.S. an ounce on the Comex division of the New York Mercantile Exchange, well below the overnight high of $1,141.40 U.S.. Most-active February gold was $15 U.S. lower at $1,111.20 U.S., well below its overnight peak of $1,143.40 U.S.
Furthermore, the February contract's low of $1,110.20 U.S. was its weakest level since Nov. 13.
Traders blame the decline on gains in the dollar that occurred when strong U.S. data again prompted ideas of possible rate hikes sooner than the market once anticipated, just as was the case following the jobs report a week ago. November retail sales rose 1.3%, compared to a consensus forecast of a 0.7% rise.
The ICE Futures U.S. December dollar index was up 0.565 point to 76.635, bouncing from 75.950 two minutes prior to the early-day report on retail sales. The euro fell to $1.4599 U.S. from $1.4729 U.S. late Thursday afternoon.
Traders buy gold as a hedge when the dollar weakens and conversely tend to sell the metal into dollar gains. Additionally, a stronger dollar makes all commodities more expensive in other currencies and thus can hurt demand.
The $1.45 U.S. area for the euro against the dollar could be pivotal for gold traders, said one analyst. Should this fail, it could prompt a retreat in gold back to the $1,070 U.S. area, he said.
