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Gold steadies on stronger U.S. dollar

Xinhua, April 21, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose Wednesday as strength in the U.S. dollar held the gains of the precious metal in check.

The most active gold contract for June delivery rose 0.1 U.S. dollar, or 0.01 percent, to settle at 1,254.40 dollars per ounce.

The U.S. dollar rebounded Wednesday, adding pressure to gold which has been on a rising streak recently. The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose 0.3 percent to 94.50 as of 1730 GMT.

A stronger dollar will hurt the appeal of greenback-denominated gold as it will become more expensive for investors holding other currencies.

Meanwhile, better-than-expected data added some downward pressure to gold, which is deemed as a safe-haven asset.

U.S. total existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 5.33 million units in March from a downwardly revised 5.07 million in February, according to the National Association of Realtors Wednesday.

However, the year-on-year rate is also worse-than-expected, at 1.5 percent, analysts said.

Traders awaited for for the release of the weekly jobless claims report and the Philadelphia Federal Reserve's business outlook survey, both due out Thursday. The Federal Reserve, the U.S. central bank, will also be watching these reports carefully for clues about when the Fed will raise interest rates.

Traders believe that the Fed may raise rates from 0.50 to 0.75 during the July meeting of the Federal Open Market Committee, the decision-making panel of the Fed. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 22 percent at the June 2016 meeting, and 38 percent at the July 2016 meeting.

Silver for May delivery rose 16.3 cents, or 0.96 percent, to close at 17.135 dollars per ounce. Platinum for July delivery added 12.4 dollars, or 1.22 percent, to close at 1,028.10 dollars per ounce. Endit