Gold prices moved higher on Friday as the dollar shed ground against some major currencies and bond yields dropped.
Traders were digesting news about the U.S. and China agreeing on a trade deal and the Conservative Party’s emphatic victory in the U.K. general election.
The dollar index opened at 96.78 and despite recovering to around 97.20 later on, was still down more than 0.2% from previous close.
The pound’s climb after Johnson’s landslide victory in the U.K. snap election contributed to the dollar’s weakness.
Gold futures for February ended up $8.90, or about 0.6%, at $1,481.20 an ounce.
On Thursday, gold futures for February ended down $2.70, or about 0.2%, at $1,472.30 an ounce.
Gold futures gained about 1.1% in the week.
On the trade front, according to reports, Chinese officials have confirmed that the U.S. and China have reached an agreement on text of a phase one trade deal.
As part of the agreement, the U.S. will not implement tariff hikes proposed to take effect on Sunday and instead, begin phasing out existing tariffs. Tariffs imposed on September 1 will now be cut to 7.5% from 15%, although the 25% tariff on other Chinese goods will remain in place.
China has reportedly agreed to many structural changes and massive purchases of U.S. agricultural products, energy, and manufactured goods.
In economic news, a report released by the Commerce Department showed retail sales in the U.S. rose by far less than economists had anticipated in the month of November.
The Commerce Department said retail sales edged up by 0.2% in November after climbing by an upwardly revised 0.4% in October.
Economists had expected retail sales to climb by 0.5% compared to the 0.3% increase originally reported for the previous month.
Another report from the Commerce Department said business inventories in the U.S. increased in line with economist estimates in the month of October, rising 0.2%, after edging down by a revised 0.1% in September.
Economists had expected inventories to edge up by 0.2% compared to the unchanged reading originally reported for the previous month.
A report from the Labor Department said import prices rose by 0.2% in November after falling by 0.5% in October. Export prices also edged up by 0.2% in November after slipping by 0.1% in the previous month. Economists had expected export prices to inch up by 0.1%.
The material has been provided by InstaForex Company – www.instaforex.com