Gold price around 6-mth lows as dollar marches higher

Local traders took their cue from further foreign institutional selling of local equities to buy USA dollars, while the main board closed slightly higher on Friday.

On Thursday, Yellen all but confirmed a first rate rise in 12 months by saying such a move would be appropriate “relatively soon” at its December 13 and 14 policy meeting, a year after the first and only rate hike since the financial crisis.

Federal Reserve Chair Janet Yellen said on Thursday the central bank could raise interest rates “relatively soon”, sending out a clear signal for a December move.

Oil refining company Tesoro will buy Western Refining for $37.30 a share in stock, a deal the companies valued at $4.1 billion.

Gap (GPS.N) fell 6.5 percent to $28.70 in premarket trading after the apparel chain said it expected a further drop in traffic during the crucial holiday shopping season.

The euro – which is facing a slew of political risks, including an Italian constitutional referendum next month and French and German elections next year – hit an 11-month low of $1.0582 before recovering to trade flat on the day at $1.0620.

The S&P financial sector ended up 0.08 percent, and has risen 10.8 percent since the USA election, boosted by prospect of higher interest rates and lighter regulation.

Nov 18 Indian shares were largely flat with a weaker rupee giving boost to export-oriented sectors such as pharma and IT, while overall sentiment was dented after U.S. Federal Reserve Chair Janet Yellen signalled an interest rate hike was imminent.

Yellen said progress in the labor market has continued and that economic activity has picked up from the modest pace seen in the first half of this year, while inflation has increased somewhat but remains below the central bank’s 2% objective.

The Fed raised its key interest rate in December 2015 and projected that it could raise rates as many as four times in 2016. This in turn has led to a rush back into the U.S. dollar.

USA stocks are hardly changed in Friday morning trading as energy companies rise with the price of oil and health care stocks trade lower.

DOLLAR SEEING GREEN: Already at its highest mark since early 2003, the dollar continued to climb.

DOLLAR: Ahead of her testimony, the dollar was fairly steady. “However, the hesitancy seen in U.S. stock markets is a clear nod to the fact that with such dollar appreciation comes an environment which is progressively more hard for United States exporters”. Japan’s Nikkei 225 barely moved and the Hang Seng index in Hong Kong eased 0.1 percent. The Shanghai Composite slipped 0.5 percent to 3,192.44 while Australia’s S&P/ASX 200 climbed 0.4 percent to 5,359.40.

But money markets are starting to price in one or more rate hikes next year, a sea change from before the election when they priced in a less than 50 per cent chance of a 2017 rate hike.

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