2021.10.2218:26:00UTC+00Gold Futures Settle Notably Higher As Dollar Slips

Gold prices climbed higher on Friday as worries about inflation and Fed Chair Jerome Powell's comments about reducing bond purchases pushed up the demand for the safe haven commodity.

A weak dollar also contributed to gold's uptick. The Dollar Index, which dropped to 93.54 around late morning, briefly emerged above the unchanged line a little past noon before edging lower again. It is currently at 93.70, down 0.07% from the previous close.

Gold futures for December ended higher by $14.40 or about 0.8% at $1,796.30 an ounce. Gold futures gained about 1.6% in the week.

Silver futures for December ended up by $0.279 at $24.449 an ounce, while Copper futures for December settled at $4.4980 per pound, down $0.0605 from the previous session.

Federal Reserve Chairman Jerome Powell indicated he is now more concerned about higher inflation and said that the central bank would watch carefully for signs that households and businesses were expecting sustained price pressures to continue.

"Supply-side constraints have gotten worse," Mr. Powell said Friday at a virtual conference. "The risks are clearly now to longer and more-persistent bottlenecks, and thus to higher inflation."

The central bank will "need to make sure that our policy is positioned for a range of possible outcomes," he said. "I do think it is time to taper. I don't think it is time to raise rates," he added.

Elsewhere, Atlanta U.S Federal Reserve President Raphael Bostic said he expects high inflation to persist into 2022 and the central bank should raise interest rates by the end of next year.

Euro zone inflation expectations among bond investors hit their highest levels in years, putting additional pressure on the European Central Bank and its insistence on maintaining crisis-era stimulus.

Meanwhile, concerns over Chinese property market eased on reports China Evergrande Group supplied funds to pay interest on a U.S. dollar bond, helping ease contagion fears.