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1st LD Writethru: Gold down sharply on stronger U.S. dollar

Xinhua, March 24, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell sharply Wednesday as the U.S. dollar showed strength.

The most active gold contract for April delivery fell 24.60 U.S. dollars, or 1.97 percent, to settle at 1,224.00 dollars per ounce. It is the lowest settlement of gold futures since Feb. 26, when it closed at 1,220.40 U.S. dollar per ounce.

Gold was put under pressure as the U.S. Dollar Index went up against most major currencies Wednesday as several Federal Reserve officials signaled an interest-rate hike as early as April.

Chicago Federal Reserve President Charles Evans said Tuesday after the market closed that the Fed is close to reaching employment and inflation targets. While the Philadelphia Fed President Patrick Harker said in the same day that upbeat U.S. outlook increasingly favors raising short-term rates again.

Some other comments from Fed officials, hinting an interest-rate increase as early as April earlier this week, had already pushed the dollar higher and weighed the dollar-denominated gold. Dennis Lockhart, Atlanta Fed President, said Monday that steady U.S. economic growth could justify increasing short-term interest rates as soon as the April meeting. Also on Monday, San Francisco Fed President John Williams said he would support an interest-rate rise in April if the U.S. economy continues to perform well.

Gold was put under further pressure as a report, released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, showed a 2.0 percent increase in new home sales in February to an annualized rate of 512,000 units, according to analysts.

Traders are anticipating the release of weekly jobless claims report Thursday as well as the gross domestic product report Friday.

Silver for May delivery fell 61.30 cents, or 3.86 percent, to close at 15.272 dollars per ounce. Platinum for April delivery dropped 36.00 dollars, or 3.61 percent, to close at 960.80 dollars per ounce. Endit