Gold down on positive U.S. data

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday on a stronger U.S. Dollar.

The most active gold contract for December delivery fell 7.9 U.S. dollars, or 0.58 percent, to settle at 1,364.7 dollars per ounce.

The precious metal was put under pressure as a report released by the U.S.-based Automated Data Processing showed its key ADP Employment Report showing private payrolls higher-than-expected at 179,000. This put pressure on the precious metal as investors developed a more optimistic outlook for the U.S. economy.

The U.S. Dollar Index rose by 0.33 to 95.42 as of 17:00 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.

Gold was put under further pressure as the U.S. Dow Jones Industrial Average rose by 30 points, or 0.16 percent as of 17:00 GMT. Analysts note 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.

As of the Federal Open Market Committee (FOMC) announcement in July, the U.S. central bank has left the door open for a rate increase during 2016, but given the Q2 GDP numbers, traders believe that is unlikely. 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 Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 18 percent at the September 2016 meeting, 21 percent at the November 2016 meeting, and 44 percent at the December meeting.

Silver for September delivery fell 23 cents, or 1.11 percent, to close at 20.471 dollars per ounce. Platinum for October delivery was down 2.5 dollars, or 0.21 percent, to close at 1,169.6 dollars per ounce. Endit