Gold rises on a weaker U.S. dollar

Gold price increased on a weaker U.S. dollar. The U.S. dollar declined against other currencies after the release of the U.S. economic data. The U.S. Commerce Department released the producer price index figures on Friday. The U.S. producer price index increased 0.3% in November, exceeding expectations for a flat reading, after a 0.4% drop in October.

A stronger U.S. dollar and weak global demand weigh on inflation.

On a yearly basis, the producer price index decreased 1.1% in November, beating forecasts of a 1.4% decline, after a 1.6% fall in October.

The producer price index excluding food and energy rose 0.3% in November, exceeding expectations for a 0.1% gain, after a 0.3% decrease in October.

On a yearly basis, the producer price index excluding food and energy climbed 0.5% in November, beating forecasts of a 0.2% increase, after a 0.1% rise in October.

The U.S. Commerce Department released the retail sales data on Friday. The U.S. retail sales climbed 0.2% in November, missing expectations for a 0.3% increase, after a 0.1% gain in October.

The lower increase was mainly driven by a fall in automobiles purchases. Sales at auto dealerships declined 0.4% in November.

Retail sales excluding automobiles increased 0.4% in November, beating forecasts of a 0.3% gain, after a 0.1% rise in October. October's figure was revised down from a 0.2% increase.

Market participants are awaiting the Fed's monetary policy meeting next week. They speculate that the Fed will start raising its interest rate this month.

Gold is traded in U.S. dollars. It suffers when the U.S. dollar strengthens, becoming more expensive for holders of other currencies.

February futures for gold on the COMEX today rose to 1078.60 dollars per ounce.