Off the wire
• Roundup: Floods devastate French cities, prompt state of emergency  • Order of play on show courts at Roland Garros on Friday (updated)  • Telecom firms to build submarine cable system in East Africa  • Roundup: ECB chief says interest rates to stay longer at low level  • Spotlight: Scientists propose ambitious project to synthesize human genome  • Ghana, Cote d'Ivoire discuss amicable solution to maritime boundary dispute  • Zambian President Lungu confident of victory in August election  • Chinese president vows to boost green, low-carbon development  • Cyprus parliament elects president from newly formed small party  • Ghana moves one place up on latest FIFA ranking  
You are here: 　 Home

Gold down slightly on Fed rate-hike expectations

Xinhua, June 3, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as traders adjusted their expectations for interest rate rising at the U.S. Federal Reserve meeting later this month.

The most active gold contract for August delivery fell 2.10 U.S. dollars, or 0.17 percent, to settle at 1,212.60 dollars per ounce.

Analysts believe that due to recent positive U.S. data and signals from the U.S. central bank that the Fed will keep a June interest rate increase on the table. The Federal Open Market Committee (FOMC) meeting minutes released in April 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 21 percent for the June meeting, 60 percent at the July 2016 meeting, and 65 percent at the September 2016 meeting.

Investors believe Fed intends to soak up some of the banks' 2.5 trillion U.S. dollars of excess reserves as the U.S. economy continues 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.

Gold was put under pressure as a report released by the U.S. Department of Labor on Thursday showed initial jobless claims falling by 1,000 to a 267,000 level during the week of May 27. Analysts noted that this figure is the lowest since the April 23 week, and is a positive sign for the big jobs report due on Friday.

The precious metal was put under further pressure as the Automated Data Processing employment report, also released on Thursday, showed private payrolls estimated at 173,000, which was within expectations, but analysts noted that it shows very little, if any, weakening in the U.S. employment situation, which is a positive and counter to expectations.

Silver for July delivery added 9.80 cents, or 0.62 percent, to close at 16.025 dollars per ounce. Platinum for July delivery dropped 11.8 dollars, or 1.21 percent, to close at 960.10 dollars per ounce. Endit