Gold to 6-year low as US dollar strengthens

Gold was trading close to six-year lows on Friday (November 27th) as a stronger US dollar weighed on the metal.

Expectations the Federal Reserve is about to raise rates is boosting demand for dollars at the expense of gold.

On the Comex in New York, gold futures for December were down 0.5 per cent at $1,064.20, a sliver above the six-year trough hit on November 24th.

Silver was also hit, with futures for December delivery falling 0.66 per cent to $14.065 a troy ounce.

The US dollar index, which measures the greenback’s strength against six major currencies, was trading above the 100 handle, just shy of Wednesday’s eight-month peak.

Bets the European Central Bank will boost stimulus continued to weigh on the euro, with EUR/USD slipping to below the 1.06 level. The single currency is also on course for its worst ever run of weekly losses against the yen.

Sterling continued to nurse losses, with GBP/USD down another 0.4 per cent to just above 1.50, its weakest since April.

In equities, European stocks were trading marginally higher in the morning session. France’s CAC and the German DAX were up 0.2 and 0.1 per cent respectively, while the FTSE 100 dipped 0.1 per cent.

Mining stocks weighed, with Anglo American falling five per cent, BHP Billiton down 2.5 per cent and Glencore off two per cent.

Earlier, Chinese stocks had fallen sharply as regulators began to probe several major brokerages.

The Shanghai Composite index closed 5.5 per cent lower at 3,436.3 as two of the main brokerages, Citic Securities and Guosen Securities, came under investigation for breaking market rules.

Japanese stocks edged away from a three-month high, with the Nikkei 225 down 0.3 per cent at 19,883.94.

Futures trading pointed to a higher open on Wall Street as markets reopen after the Thanksgiving Day holiday on Thursday.