Gold Futures Settle Modestly Lower

Gold futures settled lower on Friday, although the downside was just modest as the dollar gave up gains, retreating a bit from a 20-year high.

Concerns about a 100-bps rate hike in the upcoming Fed meeting eased following a couple of Fed officials signaling a 75-bps hike in interest rate.

A slew of encouraging U.S. economic data weighed on gold prices.

Christopher Waller and St. Louis Fed President James Bullard, two of the Federal Reserve’s most hawkish policymakers, on Thursday signaled support for a second straight 75-basis-point rate hike at the U.S. central bank’s policy meeting later this month, alleviating some fears of a 100-basis point hike.

The dollar index dropped to a low of 107.91 around late morning, and recovered to 108.10 subsequently, still down by about 0.4% from the previous close.

Gold futures for August ended lower by $2.20 or about 0.12% at $1,703.80 an ounce, after climbing to around $1,712.00 in early New York session.

Silver futures for September ended higher by $0.369 at $18.594 an ounce, while Copper futures for September settled at $3.2340 per pound, gaining $0.0225.

Data from the Commerce Department showed retail sales shot up by 1% in June after edging down by a revised 0.1% in May. Economists had expected retail sales to increase by 0.8% compared to the 0.3% dip originally reported for the previous month.

A separate report from the University of Michigan said the consumer sentiment index inched up to 51.1 in July from a record low 50.0 in June. The uptick surprised economists, who had expected the index to edge down to 49.9.

Inflation expectations also eased slightly, with one-year inflation expectations dipping to 5.2% in July from 5.3% in June and five-year inflation expectations slipping to 2.8% from 3.1%.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

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