Gold prices decline in the face of the rise of the dollar

Gold prices fell today, affected by the rise of the dollar near its highest levels in six months and the decline in the prospects of an interest rate cut in December by the Federal Reserve (US central bank).

By 01:32 GMT, gold in spot transactions fell 0.3 percent to $4,051.48 per ounce.

Gold futures for December delivery increased 0.7 percent to $4,049.50 an ounce.

The dollar rose to its highest level in nearly six months on Friday, after signs of faster US job growth in September revealed that the US central bank is likely to temporarily stop cutting interest rates in December.

A stronger dollar would make gold denominated in the US currency more expensive for holders of other currencies.

The US Labor Department’s report, delayed by the federal government shutdown, showed on Thursday that nonfarm payrolls for September rose by 119,000 jobs, more than double the estimated increase of about 50,000 jobs.

Meanwhile, US factory activity fell to a four-month low in November, as tariffs pushed up import prices, suppressing demand.

According to CME’s Vidoch tool, the probability of an interest rate cut next month fell to 69 percent on Monday, after jumping to 74 percent in the previous session.

Gold, which does not generate a yield, tends to rise in low interest rate environments.

As for other precious metals, silver fell in spot transactions by 0.3 percent to $49.86 per ounce.

Platinum increased 1.1 percent to $1,527.25. Palladium rose 0.7 percent to $1,384.18 an ounce.