gold prices closed at a five-month low on thursday, weighed down by a stronger u.s. dollar and expectations for an interest-rate increase as early as december. gold for december delivery settled down 0.6% at $1,216.90 a troy ounce on the comex division of the new york mercantile exchange, its lowest close since june 2. the precious metal reversed gains after trading as high as $1,229.30 an ounce on thursday morning. the wsj dollar index was recently up 0.6% at 91.13, marking its ninth consecutive day of gains . a stronger dollar tends to hurt demand for gold, since the metal is priced in the u.s. currency and becomes more expensive to foreign investors when the greenback rises. on thursday, ms. yellen said that a rate increase <u+201c>could well become appropriate relatively soon,<u+201d> in a prepared testimony. the market largely expects the central bank to raise rates at the next policy meeting in december. gold pays its holders nothing, so it struggles to compete with yield-bearing assets like treasurys when borrowing costs rise. <u+201c>there<u+2019>s not a lot of strong conviction<u+201d> in gold, said bob haberkorn, senior market strategist at rjo futures. <u+201c>gold<u+2019>s stuck here right now.<u+201d> the precious metal sold off following the u.s. presidential election, as investors grew optimistic about economic growth under a donald trump presidency, and the flight to safe-haven assets slowed. some analysts note that a december rate increase may already be discounted from the current gold price, limiting further losses. <u+201c>with a december fed hike largely priced in now, we think the downside risk from here is not a game changer necessarily for gold,<u+201d> analysts at rbc capital markets wrote on thursday. write to stephanie yang at stephanie.yang@wsj.com
gold reverses gains under pressure from stronger dollar - wsj
stephanie yang