Metals Prices Plunge as Dollar Dashes Higher, Tariff Concerns Weigh

Investing.com – Metal prices were under pressure Thursday as solid U.S. economic data renewed bullish bets on the greenback, pressuring gold prices toward the psychologically important $1,200 level.

for December delivery on the Comex division of the New York Mercantile Exchange fell by $5.90, or 0.50%, to $1,205.50 troy ounce, just above an intraday low of $1,202.10.

Gold prices, which are on track to resume their weekly decline, after snapping a six-week losing streak last week, came under pressure following a rise in the dollar on data showing inflation continued to meet the Federal Reserve’s target and consumer spending remained firm.

The Federal Reserve’s preferred inflation measure — the personal consumption expenditures (PCE) price index excluding food and energy — in the 12 months through July.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, last month, the Commerce Department said on Thursday.

The duo of reports added to already-heightened investor expectations for a Federal Reserve rate hike at next month’s meeting.

The , which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.23% to 94.68.

According to Investing.com’s , 100% of traders expect the Federal Reserve to raise rates in September.

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.

The wider metals struggled to pare losses as the headwind from a stronger dollar was exacerbated by concerns that the U.S.-China trade war could intensify.

fell 0.64% to $2.72 a pound, while plunged 2.30% at 2,458.50.

lost 1.31% to 2,131.75, while fell 1.06% to 13,307.50.

dropped 1.51% to $14.48 a troy ounce, while fell 0.58% to $792.00.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.