Metal Prices Mixed Despite Subdued Dollar

Investing.com – Metal prices traded mixed benefiting from a weaker dollar despite a preliminary reading of second-quarter U.S. economic growth showing the economy grew at its fastest pace in nearly four years.

for August delivery on the Comex division of the New York Mercantile Exchange fell by $1.60, or 0.13%, to $1,224.10 a troy ounce, but remained well above an intraday low of $1,216.70.

increased at a 4.1% annual rate in the April-June period, the Commerce Department said Friday in its first estimate.

Analysts questioned the sustainability of growth, however, as the benefits from fiscal stimulus on economic growth are expected to wane next year.

“While we expect the economy to remain strong in the near-term, we see growth slowing sometime next year as fiscal stimulus fades and tighter monetary conditions begin to bite,” BNP Paribas (PA:) said in a note to clients Friday.

The data pressured the dollar to retreat from five-day highs, helping gold prices to steady, as some suggested the GDP data was already baked into the greenback’s recent surge. Others suggested market participants were unimpressed by the data as they had expected to see growth reach closer to 5%.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.12% to 94.46.

Gold is sensitive to moves higher in both bond yields and the U.S. 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 gold as it pays no interest.

In the wider metal markets, trading was mixed as trade-war concerns continued to weigh amid expectations that President Donald Trump will ramp up trade rhetoric against China as U.S.-Europe relations appear to be on the mend.

China said Thursday it was ready to retaliate against any increase in U.S. tariffs on Chinese imports – be it $16 billion or $200 billion – an official in Beijing said, according to Bloomberg.

fell 0.82% to $2.80, while fell 0.01% at 2,589.00.

fell 0.35% to 2,061.00, while Nickel futures fell 0.13% to 13,780.00.

rose 0.10% to $15.51 a troy ounce, while fell 0.29% to $833.30.

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