Gold moves sharply higher as the US dollar falls

WASHINGTON (dpa-AFX) – After going on a four-day losing streak during the previous session, the price of gold showed a strong upward move during trading on Friday.

Gold for October delivery rose $37, or 1.4 percent, to $2,657.60 an ounce, after rising 0.6 percent to $2,620.60 an ounce on Thursday.

The precious metal benefited from modest weakness in the value of the US dollar, with the US dollar index falling 0.13 points or 0.1 percent to 102.86.

The sharp rise in gold prices also came after the Labor Department released a report showing that US producer prices were unexpectedly unchanged in September.

The Labor Ministry said the producer price index for final demand was flat in September after rising 0.2 percent in August. Economists had expected producer prices to rise 0.1 percent.

The report also said the annual growth rate of producer prices slowed to 1.8 percent in September, compared to an upwardly revised 1.9 percent in August.

Economists had expected the annual growth rate of producer prices to fall to 1.6 percent, down from the 1.7 percent originally reported for the previous month.

The data reinforced optimism that the Federal Reserve will continue to cut rates in coming months, although hopes for another 50 basis point cut next month have largely evaporated.

“After an upside surprise from the September CPI report, producer prices came in below expectations and provide support for a 25 basis point rate cut in November,” said Matthew Martin, Senior US Economist at Oxford Economics.

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