Expectations for a further delay in U.S. interest-rate hikes weakened the U.S. dollar
Bullion prices ended higher at Comex on Friday, 09 October 2015. Gold prices rallied on Friday to settle at a level not seen since late August as expectations for a further delay in U.S. interest-rate hikes weakened the U.S. dollar, lifting the metal's investment appeal.
Gold for December delivery jumped $11.60, or 1%, to settle at $1,155.90 an ounce on Comex for its highest settlement since 21 August. For the week, prices logged a gain of 1.7%.
Silver for the same month put on 5.2 cents, or 0.3%, to $15.818 an ounce, ending about 3.6% higher on the week.
Late Thursday, the Federal Open Market Committee released the minutes from the meeting last month in which it had decided to hold rates near zero. Investors interpreted the minutes as further proof that U.S. interest rates may remain on hold for the rest of the year.
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Against that backdrop, the U.S. dollar index moved lower on Friday, offering support for metals prices, including gold. Gold doesn't yield interest and competes more easily against assets that do, like Treasurys, when rates are pinned near zero. And, like most commodities, the metal is priced in dollars and becomes cheaper to buy for those using stronger currencies when the greenback softens.
Economic data at Wall Street was limited to Import/Export Prices and Wholesale Inventories. Export prices, excluding agriculture, decreased 0.6% in September after decreasing 1.3% in the prior reading. Excluding oil, import prices decreased 0.3%, which followed last month's decrease of 0.4%. Wholesale inventories increased 0.1% in August after a downwardly revised 0.3% decline (from -0.1%) while the consensus expected no change.
Durable wholesale inventories increased 0.3% after declining 0.1% in July with a 0.3% decline in automotive inventories offsetting a 0.9% increase in electrical inventories and a 0.5% increase in machinery inventories. Nondurable wholesale inventories declined 0.2% in August after declining 0.5% in July with lower oil prices helping reduce petroleum inventories (-1.4%) for the second month in a row. Meanwhile, farm product inventories declined 3.1% after declining 1.2% in July.
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