WASHINGTON (dpa-AFX) - Gold prices dropped to more than one-month low on Wednesday as the dollar gained in strength amid fading prospects of an early interest rate cut by the Federal Reserve after data showed a bigger than expected increase in U.S. retail sales in the month of December.
The dollar index, which surged to 103.69, was at 103.57 a little while ago, gaining about 0.21%.
Gold futures for February ended down $23.70 or about 1.2% at $2,006.50 an ounce.
Silver futures for March ended lower by $0.424 at $22.669 an ounce, while Copper futures for March settled at $3.7330 per pound, down $0.3335 from the previous close.
Data from the Commerce Department showed retail sales in the U.S. climbed by 0.6% in December after rising by 0.3% in November. Economists had expected retail sales to advance by 0.4%.
A report released by the Federal Reserve showed industrial production in the U.S. inched up 0.1% in December.
Hawkish signals from Fed and ECB officials have raised more doubts about the prospects for early rate cuts.
'Gold is being hit for a second day on the back of market positioning being slightly less bullish on rate cuts. US yields have crept higher over the last couple of days, with the 10-year moving back above 4% and that has weighed on the yellow metal,' says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA. 'Gold suddenly looks a little vulnerable as it approaches the psychologically significant $2,000 having just hit a one-month low,' he adds.
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