Daily Gold Update

Source: Marketwatch

New York— Gold prices on Friday closed with modest daily gains but stiff weekly losses as the dollar strengthened against the euro and other major currencies, curbing investors' appetite for the precious metal as an inflation hedge. "The U.S. dollar seems to be the main drive in the commodity markets at the moment, weighing mainly on precious metals prices this week," wrote Credit Suisse analysts Tobias Merath and Eliane Tanner in a research note. "Next week, we expect the release of the consumer price index for the Eurozone to influence trading in the precious metals sector."

Gold prices had declined early on Friday as the dollar gained after data showed the U.S. consumer price index climbed 0.6% in May, the fastest pace in six months. Metals investors weighed the CPI data with an eye on whether rising inflation would increase chances of a Federal Reserve interest rate hike later in the year, bolstering the dollar. The dollar index, which tracks the currency against six trading partners, hit 74.14, up from 73.98 late Thursday. Strength in the U.S. currency tends to weigh on gold, which is often sought as a hedge against weakness in the greenback, while gold usually tracks the price of crude-oil futures as a hedge against oil-inspired inflation. See full story.