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Gold down on stronger U.S. dollar, data

Xinhua, July 23, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday as stronger U.S. data and a stronger U.S. dollar put pressure on gold.

The most active gold contract for August delivery fell 7.6 U.S. dollars, or 0.57 percent, to settle at 1,323.40 dollars per ounce.

Gold was put under pressure as a report released on Friday by the Institute for Supply Management showed the purchasing managers index Manufacturing Index Flash measure increasing to 52.9 during the month of July.

Analysts note that this was better than expected and that gains in output and employment lead the strength in the measure.

The precious metal was also put under further pressure as the U.S. Dollar Index rose by 0.54 percent to 97.49 as of 17:30 GMT. The index is a measure of the dollar against a basket of major currencies. 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.

The U.S. Federal Reserve is scheduled to meet next week for the first time since several global terror attacks and the failed coup in Turkey. Traders believe that the Fed will delay the previously expected July interest rate increase until 2017.

Previous Fed minutes led traders to believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group' s Fed watch tool, the current implied probability of a hike from 0.50 to 0.75 is at 2 percent for the July meeting, 20 percent at the September 2016 meeting, 22 percent at the November 2016 meeting, and 48 percent at the December meeting.

For next week, Traders are expecting the new home sales report to be released on Tuesday, the durable goods orders report on Wednesday along with the Federal Open Market Committee announcement. Thursday will have the international trade in goods report, as well as the weekly jobless claims, and Friday will see the release of the gross domestic product report.

Silver for September delivery fell 12.6 cents, or 0.64 percent, to close at 19.689 dollars per ounce. Platinum for October delivery dropped 19.6 dollars, or 1.77 percent, to close at 1,088.40 dollars per ounce. Enditem