Gold falls on strong US data

Frankfurt (Dec 12)  Gold prices in Europe on Friday further shed gains after positive data out of the US buoyed the dollar but kept above important technical levels.

Spot gold was trading at $US1,224.67 a troy ounce, down 0.2 per cent in morning European trade, but above $US1,220 which provides a floor for the yellow metal.

US retails sales rose 0.7 per cent in November, ahead of analyst expectations.

As gold is dollar-denominated, it becomes more expensive for other currency-holders to buy when the greenback gains. This means demand tends to fall and prices drop.

Looking forward, "gold is likely to trade in a position of strength from now till next week's FOMC [Federal Open Market Committee], as investors eagerly await the final press conference of 2014 from the Fed [Federal Reserve]," said Howie Lee, an investment analyst at Phillip Futures.

The precious metals were mixed. Silver was up 0.6 per cent at $US17.164 an ounce, platinum was up 0.2 per cent at $US1,238.20 an ounce, and palladium was down 0.2 per cent at $US815.30 an ounce.

Source: BusinessSpeculator