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Gold lower on positive U.S. data

Xinhua, June 2, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as positive U.S. data encouraged investors.

The most active gold contract for August delivery fell 2.80 U.S. dollars, or 0.23 percent, to settle at 1,214.70 dollars per ounce.

A report released on Wednesday by the U.S.-based Institute for Supply Management showed its key ISM manufacturing index increasing by 0.5 points to a better-than-expected 51.3 points during the month of May. Analysts noted that deliveries increased by 5 points to 54.1 which they say is usually a sign of strong demand.

Traders are waiting for the release of the weekly jobless claims report due on Thursday, and also the international trade report and big employment situation report due on Friday. Investors will be carefully watching the big jobs report on Friday because it will likely have a large impact on the thinking of the Federal Reserve during the June Federal Open Market Committee (FOMC) meeting.

Ever since the release of the April Federal Open Market Committee (FOMC) meeting minutes, traders believe that the Fed will keep a June interest rate increase on the table. The minutes led traders to believe that the Fed may raise rates from 0.50 to 0.75 during the June FOMC meeting. According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 23 percent for the June meeting.

Silver for July delivery lost 6.70 cents, or 0.42 percent, to close at 15.927 dollars per ounce. Platinum for July delivery declined 8.50 dollars, or 0.87 percent, to close at 971.90 dollars per ounce. Endit