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Gold down despite weaker U.S. equities, dollar

Xinhua, January 14, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday on a technical bounce, despite weakness in the U.S. dollar and U.S. equities.

The most active gold contract for February delivery fell 3.6 U.S. dollars, or 0.30 percent, to settle at 1,196.20 dollars per ounce.

Trading volume was notably lower on Friday than on Thursday as traders are preparing to leave for the long holiday weekend. Analysts note that gold hit a key technical resistance level and fell as a result, despite a weaker U.S. dollar and equities.

The precious metal was given a slight amount of support as a report released on Friday by the U.S. Department of Commerce showed retail sales increasing by 0.6 percent during the month of December, a figure which analysts note was slightly below expectations but still within the expectations range.

The U.S. Dollar Index fell by 0.28 percent to 101.17 as of 1830 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

U.S. equities also put the precious metal under pressure as the U.S. Dow Jones Industrial Average fell by 34.92 points, or 0.18 percent as of 1830 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Gold was put under pressure as a report released by the U.S. Department of Labor on Friday showed the producer price index increasing by 0.3 percent during the month of December, a figure which analysts note is moving in the right direction. This figure was in-line with expectations and likely only gave minor pressure to the precious metal.

Next week will see a shortened trading week as the U.S. Martin Luther King Jr. holiday will result in the markets closing on Monday.

Silver for March delivery fell 6 cents, or 0.36 percent, to close at 16.765 dollars per ounce. Platinum for April delivery added 1.7 dollars, or 0.17 percent, to close at 986.40 dollars per ounce. Endit