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Gold falls on stronger U.S. dollar, equities

Xinhua, July 12, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell slightly on Monday as the U.S. dollar and U.S. equities rose.

The most active gold contract for August delivery fell 1.80 U.S. dollars, or 0.13 percent, to settle at 1,356.60 dollars per ounce.

The precious metal was put under pressure as the U.S. Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.21 to 96.56 as of 1730 GMT.

Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Gold was further weighed on as the U.S. Dow Jones Industrial Average rose by 115.32 points or 0.64 percent as of 1730 GMT. Analysts noted that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

In the wake of the United Kingdom leaving the European Union, traders believe that the U.S. Federal Reserve will delay the previously expected July interest rate increase until 2017.

According to the CMEGroup's Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 0 percent for the July meeting, 12 percent at the September 2016 meeting, and 11 percent at the November 2016 meeting, and 32 percent at the December meeting.

Traders are waiting for the Job Openings and Labor Turnover Survey on Tuesday, the Import and Export Prices report on Wednesday, the weekly jobless claims report and producer price index on Thursday, and the retail sales, consumer price index, and industrial production reports on Friday.

Silver for September delivery rose 20.50 cents, or 1.02 percent, to close at 20.304 dollars per ounce. Platinum for October delivery added 7.90 dollars, or 0.72 percent, to close at 1,108.10 dollars per ounce. Endit