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Gold up after Fed minutes release

Xinhua, August 19, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday after the release of the Fed minutes.

The most active gold contract for December delivery rose 8.4 U.S. dollars, or 0.62 percent, to settle at 1,357.2 dollars per ounce.

The minutes from the previous Federal Open Market Committee (FOMC) meeting were released after the market' s close on Wednesday, and gave extensive support to the precious metal.

Traders 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 12 percent at the September 2016 meeting, 16 percent at the November 2016 meeting, and 46 percent at the December meeting.

Gold was given support as a report released by the Philadelphia Federal Reserve showed its General Business Conditions Index reading at 2.0 during the month of August. Analysts note that this was in line with expectations but that certain measures within the report were worse-than-expected. New orders dropped to negative 7.2, and backlog orders decreased to negative 15.0, both of which are the weakest reading of 2016.

The precious metal was prevented from rising further as the U.S. Department of Labor showed initial jobless claims decreasing by 4,000 to 265,000 during the week of August 13. Analysts note that this was better than expected and is likely to have a strong impact on the August employment report as this week is the sample period for that report.

The U.S. Dollar Index fell by 0.46 percent to 94.29 as of 1730 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.

Silver for September delivery rose 9.2 cents, or 0.47 percent, to close at 19.74 dollars per ounce. Platinum for October delivery rose 18.5 dollars, or 1.66 percent, to close at 1,133.2 dollars per ounce. Enditem