1st LD Writethru: Gold down on stronger dollar
Xinhua, March 6, 2015 Adjust font size:
Gold futures on the COMEX division of the New York Mercantile Exchange dropped on Thursday as a weakened euro caused the U.S. dollar to strengthen considerably.
The most active gold contract for April delivery fell 4.7 U.S. dollars, or 0.39 percent, to settle at 1,196.20 dollars per ounce.
The U.S. Dollar Index rose on Thursday by 0.54 percent to 96.43, putting gold under pressure. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.
Despite the weakness in U.S. data, analysts say that investors stayed with the dollar instead of moving to safe haven assets like gold because of the weakness in the eurozone.
The precious metal was given support as a report from the U.S. Department of Labor showed initial jobless claims rose by 7,000 to a much higher-than-expected 320,000 claims during the Feb. 28 week. This report comes ahead of Friday's employment situation report, but analysts caution that it is unlikely that the jobless claims will affect the report on Friday.
Mario Draghi, president of the European Central Bank (ECB), confirmed Thursday that the ECB's 1.1 trillion euro quantitative easing program will begin on March 9. ECB also raised its eurozone growth projections for 2015 and 2016 to 1.5 percent and 1.9 percent. Analysts noted that after this news, the U.S. stocks trade higher and the gold traded lower.
Two other reports, both from the U.S. Department of Commerce, put upward momentum on gold. One report showed factory orders dropped for the sixth month in a row. January orders was down 0.2 percent. Another report found non-farm productivity growth in the fourth quarter declining by 2.2 percent. Both reports were slightly worse than expected.
Silver for May delivery remained unchanged, to close at 16.158 dollars per ounce. Platinum for April delivery fell 1.6 dollars, or 0.14 percent, to close at 1,180.10 dollars per ounce. Endite