Gold Prices Rise as U.S. Dollar Falls on Weak Data

Gold prices rose on Friday as the U.S. dollar fell after lower than expected economic data.

Comex gold futures for December delivery rose 0.36% to $1,212.50 a troy ounce as of 4:32 AM ET (8:32 GMT).

Data on Thursday showed that inflation pressures in the U.S. are easing, increasing concern that the Federal Reserve could ease its stance on monetary policy. Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

Consumer prices in the U.S. rose less than expected in August, increasing 0.2% compared to expectations of a gain of 0.3%.

The inflation numbers came just a day after data showed the producer price index fell 0.1% last month.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.10% to 94.44.

Gold usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Meanwhile trade talk efforts between the U.S. and China cooled after U.S. President Donald Trump tweeted that the country “was under no pressure to make a deal with China.”

China had accepted the invitation for fresh trade talks later this month in an effort to stave off new tariffs but an editorial in the state-owned newspaper China Daily said that Beijing would not “surrender to the U.S. demands.”

U.S. President Donald Trump has threatened impose tariffs on almost all Chinese imports, or about $467 billion in goods, while China is planning to ask the WTO for permission to impose sanctions on the U.S. at a meeting next week.

Other metals were mixed on the Comex, with silver futures up 0.15% to $14.265 a troy ounce. Among other precious metals, Platinum Futures rose 0.76% to $809.40 while Palladium Futures increased 0.38% to $972.40 an ounce. Copper futures feel 1.52% to $2.669 a pound./

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