Investing.com – Gold prices trimmed gains on Friday, pulling away from three-and-a-half week highs as the release of strong U.S. housing sector data sent the greenback broadly higher.
Comex were up 0.23% at $1,358.2 a troy ounce by 08:50 a.m. ET (12:50 GMT), after rising to a three-and-a-half week peak of $1,364.40 earlier in the day.
The dollar rebounded after data showed that U.S. homebuilding in January and that building permits soared to their highest level since 2007.
The greenback came under broad selling pressure earlier amid fresh concerns over the U.S. deficit, which is projected to climb near $1 trillion in 2019 following the announcement of infrastructure spending and large corporate tax cuts.
The dollar had initially strengthened after the U.S. Commerce Department reported on Wednesday that consumer prices rose more than expected in January by , sending U.S. bond yields higher.
Data on Thursday showed that the U.S. producer price index rose in line with expectations by last month.
Rising inflation would be a catalyst to push the Federal Reserve toward raising interest rates at a faster pace than currently expected.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.34% at 88.77, off a three-year trough of 88.16 hit earlier.
Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, were down 0.15% at $16.77 a troy ounce.
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Source: Investing.com
