Gold Ends Sharply Higher On Weak Dollar

(RTTNews) - Gold futures ended sharply higher on Friday, after the dollar turned lower against a select band of currencies and on bargain hunting.

A weak dollar tends to makes dollar-denominated commodities such as gold much cheaper and attractive for holders of other currencies.

In economic news, a Commerce Department report showed U.S. retail sales in October rebounded more than anticipated, having reported a modest drop in sales in the previous month.

A separate Commerce Department report showed U.S. business inventories to have increased in line with economist estimates in September. As well, U.S. business inventories increased in line with economist estimates in September.

A Labor Department report on Friday showed a notable decrease in U.S. import prices in October, with fuel prices dropping sharply.

Concerns over imminent U.S. interest rates and slowing demand also weighed down the precious metal, with markets looking out for further cues.

Gold for December delivery, the most actively traded contract, jumped $24.10 or 2.1 percent to settle at $1,185.60 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,192.90 and a low of $1,146.00 an ounce.

On Thursday, gold futures ended lower on some disappointing economic data from the U.S. with initial claims for unemployment benefits rising more than expected last week.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 720.62 tons on Friday from its previous close of 722.67 tons on Thursday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.55 on Friday, down from its previous close of 87.77 late Thursday in North American trade. The dollar scaled a high of 88.27 intraday and a low of 87.43.

The euro trended higher against the dollar at $1.2529 on Friday, as compared to its previous close of $1.2476 late Thursday in North American trade. The euro scaled a high of $1.2543 intraday and a low of $1.2400.

In economic news, a report from the Commerce Department showed U.S. retail sales in October rebounded more than anticipated, having reported a modest drop in sales in the previous month. The rebound was partly attributed to a jump in sales by non-store retailers. U.S. retail sales rose 0.3 percent in October, offsetting the 0.3 percent drop seen in September. Economists expected sales to edge up by 0.2 percent.

Separately, a Commerce Department report showed U.S. business inventories to have increased in line with economist estimates in September. Business inventories rose 0.3 percent in September after inching up by a downwardly revised 0.1 percent in August. Economists expected inventories to climb by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month. Manufacturing inventories edged up by 0.2 percent, while retail and wholesale inventories both rose by 0.3 percent.

Consumer sentiment in the U.S. has improved much more than anticipated in November, a report from Thomson Reuters and the University of Michigan showed Friday. A preliminary reading on the consumer sentiment index for November came in at 89.4 compared to the final October reading of 86.9. Economists expected the index to show a more modest increase to 87.5. The consumer sentiment index scaled its highest level since July 2007.

Meanwhile, a Labor Department report on Friday showed a notable decrease in U.S. import prices in October, with fuel prices dropping sharply. The import price index tumbled 1.3 percent in October after falling by a revised 0.6 percent in September. Economists expected import prices to drop by 1.5 percent compared to the 0.5 percent decrease originally reported for the previous month.

The Eurozone economy grew at a faster-than-expected pace in the third quarter, helped by economic recovery in Germany and France, while Italy contracted again. Gross domestic product grew a seasonally adjusted 0.2 percent from the second quarter, flash estimates from Eurostat showed Friday. Economists forecast the growth rate to remain unchanged at 0.1 percent.

Among major economies in the eurozone, Germany and France dodged recession, while Italy shrank again taking the economy back into recession.