Gold Futures Settle Lower As Dollar Rises On Aggressive Rate Hike Bets

Gold prices fell sharply on Friday, weighed down by a surging dollar amid bets the Federal Reserve will aggressively tighten its monetary policy to control rising consumer prices.

Data released by the Labor Department on Thursday had showed consumer prices in the U.S. rose by more than expected in September, raising concerns about the outlook for interest rates. The data said the consumer price index rose by 0.4% in September after inching up by 0.1% in August. Economists had expected consumer prices to edge up by 0.2%.

The dollar index climbed to 113.42, gaining nearly 1%.

Gold futures for December ended lower by $28.10 or about 1.7% at $1,648.90 an ounce. Gold futures shed about 3.5% in the week.

Silver futures for December ended down $0.847 at $18.071 an ounce, while Copper futures for December settled at $3.4235 per pound, down $0.0170 from the previous close.

In economic news today, a report from the University of Michigan showed a rebound in inflation expectations in the month of October. One-year inflation expectations climbed to 5.1% in October after dropping to a one-year low of 4.7% in September, while five-year inflation expectations increased to 2.9% in October after falling to 2.7% in September.

The data has led to renewed inflation concerns after optimism inflation has peaked contributed to a substantial turnaround on Wall Street on Thursday.

The University of Michigan also said its consumer sentiment index crept up to 59.8 in October from 58.6 in September. Economists had expected the index to inch up to 59.0.

Data from the Commerce Department showed U.S. retail sales came in unchanged in the month of September after rising by an upwardly revised 0.4% in August.

Another report from the Commerce Department showed business inventories in the U.S. climbed by 0.8% in August after rising by a revised 0.5% in July.

A report from the Labor Department showed import prices in the U.S. plunged by 1.2% in September after tumbling by a revised 1.1% in August. Economists had expected import prices to dive by 1.1% compared to the 1% slump originally reported for the previous month.

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