London: Gold fell more than 1 per cent on Friday, breaking below chart support at $1,150 an ounce, as the dollar hit a four-year high against a currency basket after upbeat US retail sales data.
The Commerce Department said US retail sales rose 0.5 per cent in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace.
Spot gold hit a session low of $1,146.64 after the report and was down 1 per cent at $1,149.95 an ounce at 1402 GMT.
US gold futures for December delivery were down $12.50 an ounce at $1,149.00.
Gold, which is priced in the US unit, has struggled to recover from last week’s 4-1/2-year low of $1,131.85.
“We have dollar strength triggered by the stronger retail sales numbers from the United States, and on the investment side we see ongoing outflows from physically backed gold products,” Julius Baer analyst Carsten Menke said. “This is clearly an environment which is weighing on prices.” Gold, set to fall for a third week in four, has suffered from perceptions that the US recovery is outpacing that of other economies.
That has led to bets that US interest rates will rise faster than others. Rising rates weigh on gold as they lift the opportunity cost of holding non-yielding assets.
“We maintain a view of lower gold prices based on the progressive economic recovery and the outlook for higher interest rates next year in the States,” Menke said.
Holdings of the world’s top gold-backed exchange-traded fund, SPDR Gold Shares, fell 2 tonnes on Thursday, an eighth straight day of outflows, to a six-year low of 720.62 tonnes.
Buying interest in Asia picked up this week, though Japanese consumers sold gold jewellery and bars as yen-priced bullion hit three-month highs.
Silver was down 1.7 per cent at $15.33 an ounce, while spot palladium was down 1.4 per cent at $755 an ounce.
Spot platinum was down 1.1 per cent at $1,178.50 an ounce, having earlier touched a five-year low at $1,172.80.
