Gold fell 1.5 per cent to below $1,080 (U.S.) an ounce on Friday as the U.S. dollar hit a seven-month high versus a basket of currencies after China unveiled a surprise hike in commercial banks’ reserve requirements.
The precious metal has re-established its usual inverse relationship to the dollar after safe-haven buying pushed both assets higher in the previous session.
Spot gold was bid at $1,078.95 an ounce at 1107 GMT versus $1,095.85 late in New York on Thursday. In that session it hit a one-week high of $1,097.75 an ounce as investors bought the metal amid fears over the stability of paper currencies.