Gold declined but losses capped by drops in the dollar

Gold fell on Friday morning in Asia but was established for its best week in longer than five months. 

Drops in the dollar and U.S. Treasury yields also capped the yellow metal’s declines even as the U.S. Federal Reserve prepares to start asset tapering.

Gold futures trimmed down 0.11% to $1,795.95 by 11:55 PM ET (3:55 AM GMT). Following hitting a one-month high of $1,800.12 on Thursday. It is higher 2.1% for the week so far. The dollar, which usually moves inversely to gold, crept up on Friday.

Gold futures are trimming lower early Friday after reaching a one-month high the prior session. The market is currently balancing the pair of 50% levels at $1795.00 and $1800.00 that should define the next notable move in the market.

At 07:01 GMT, December Comex gold futures are trading $1792.40, falling $5.50 or -0.31%.

The improvement in the U.S. job market is widely observed as sufficient for the Fed to begin tapering as intended in November 2021. However, divisions persist even among the central bank’s officials.

Global policymakers should proceed to observe pricing dynamics closely but also “look through” inflationary tensions that are transitory and will disappear as economies normalize, the International Monetary Fund’s steering committee stated on Thursday.

Producer price index data

U.S. data published on Thursday revealed that the producer price index increased 0.5% month-on-month in September. A lower-than-expected 293,000 initial unemployment claims were filed throughout the week. Additional data, including retail sales and the University of Michigan consumer sentiment and Michigan consumer expectations indexes, will be published later in the day.

Meantime, miner Barrick Gold Corp. (NYSE: GOLD) reported an almost 5% increase in third-quarter gold production from the prior three months. This is largely thanks to improved production at its Veladero mine in Argentina.

Silver dropped 0.4% to $23.45 per ounce in other precious metals but was valued in seven for its biggest weekly gain. Platinum slid 0.1% to $1,054.09 after kicking its highest level after Aug. 2 at $1,062.50 on Thursday, while palladium bound up 0.2%.