Gold Futures Settle Lower As Dollar Rises

Gold futures settled lower on Friday as the dollar firmed against its major counterparts, and bond yields surged amid prospects of the Federal Reserve continuing to hold interest rates at higher levels for more time.

The dollar index climbed to 103.68, gaining nearly 0.45%.

Gold futures for April ended lower by $4.00 or about 0.2% at $1,874.50 an ounce.

Silver futures for March ended down $0.068 at $22.075 an ounce, while Copper futures for March settled at $4.0165 per pound, down $0.0805 from the previous close.

Data released by the University of Michigan this morning showed U.S. consumer sentiment saw a continued improvement in February. The report also showed a rebound in near-term inflation expectations.

The report showed the consumer sentiment index rose to 66.4 in February from 64.9 in January. Economists had expected the index to inch up to 65.0.

The consumer sentiment index increased for the third straight month, reaching its highest level since hitting 67.2 in January 2022.

Meanwhile, one-year inflation expectations climbed to 4.2% in February from 3.9% in January, with expectations rebounding after falling for three straight months.

Richmond Fed President Thomas Barkin said it’s important for the U.S. central bank to continue to raise rates to ensure if brings inflation back to the 2 percent target.

In Europe, the Bundesbank’s president, Joachim Nagel, reaffirmed his call for more interest rate increases.

Elsewhere in Asia, the Reserve Bank of Australia boosted its forecast for core inflation and wages growth this year, and flagged further increases in interest rates.

A preliminary report on U.S. consumer sentiment, which includes readings on inflation expectations, may sway sentiment as the day progresses.

U.S. and British inflation readings, U.S. retail sales and industrial production data, and Japan GDP figures are due to be unveiled next week.

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