By Lorena Ruibal
LONDON--Gold prices moved lower Friday, as the dollar strengthened ahead of the release of the first official estimate of U.S. second-quarter gross domestic product, which is expected to show robust growth.
The precious metal was down 0.26% at $1,219.51 a troy ounce on the London Metal Exchange in midmorning trade.
The price of copper, meanwhile, was also down by 0.21% to $6,268 a metric ton. Fears of a credit crunch and significantly slower growth in China weighed on base metals, according to Goldman Sachs analysts in a note.
The U.S. economy is expected to have grown at a seasonally adjusted annual growth rate between 4% and 5% in the second quarter. A strong economic performance during the period would be perceived as supportive of the Federal Reserve's plans to raise interest rates.
Rising interest rates tend to make yield-bearing assets more attractive than gold to investors, as gold doesn't pay interest. Higher rates also tend to boost the dollar against its peers, which makes dollar-denominated metals more expensive for foreign buyers.
"A strong GDP figure will support expectations that the Fed will look to raise rates four times across the year. Whilst three rates hikes are fully priced in, investors remain unsure about the fourth which is only 65% priced in," said London Capital Group analyst Jasper Lawler.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 of its peers, was up 0.13%.
Among precious metals, silver was down by 0.39% at $15.34 a troy ounce, palladium was down 0.19% at $928.20 troy ounce and platinum was down by 0.39% at $822.25 a troy ounce.
Among base metals, zinc was down 0.35% at $2,583.50 a metric ton, aluminum was up by 0.19% to $2.072.00 a metric ton, tin was up 0.08% at $19,845.00 a metric ton, nickel was up 0.18% to $13,805.00 a metric ton and lead was down 0.28% at $2,162.00 a metric ton.
Write to Lorena Ruibal at [email protected]