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1st LD Writethru: Gold up on weaker U.S. dollar

Xinhua, February 5, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose Thursday on a weaker U.S. dollar.

The most active gold contract for April delivery rose 16.2 U.S. dollars, or 1.42 percent, to settle at 1,157.50 dollars per ounce.

The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, fell by 0.9 percent to 96.42 as of 18:25 GMT. Gold and the dollar typically move in opposite directions.

Gold was given further support as the weekly jobless claims report issued on Thursday by the U.S. Department of Labor showed weakness.

In the week ending on Jan. 30, initial jobless claims rose by 8,000 to 285,000. The figure, though worse than expected, is unlikely to dent traders' expectations for the big U.S. jobs report due out on Friday, analysts said.

However, long-term pressure remains. During the January Federal Open Market Committee (FOMC) meeting, the central bank left the door open for a March rate hike. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 10 percent for the March meeting, and 14 percent at the April meeting.

Analysts believed the goal of the Fed is to soak up some of the banks' 2.5 trillion U.S. dollars of excess reserves as the U.S. economy begins to recover. Banks become more willing to take risks in a bullish economy, and as a result could potentially release some of their excessive reserves, flooding the economy with cash, causing inflation.

Silver for March delivery added 11.6 cents, or 0.79 percent, to close at 14.85 dollars per ounce. Platinum for April delivery rose 26.2 dollars, or 2.98 percent, to close at 906.30 dollars per ounce. Enditem