Gold down on Fed comments

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as a member of the U.S. Federal Reserve indicated that they could raise interest rates sooner than expected.

The most active gold contract for December delivery fell 5.1 U.S. dollars, or 0.38 percent, to settle at 1,324.6 dollars per ounce.

The precious metal was put under pressure as Kansas City Federal Reserve President Esther George indicated her support for a rate hike sooner rather than later, basing her comments on healthy U.S. data.

Investors believe that the U.S. central bank has left the door open for a rate increase during 2016. 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 24 percent at the September 2016 meeting, 30 percent at the November 2016 meeting, and 57 percent at the December meeting.

Gold was put under further pressure as the U.S. Department of Labor released a report on Thursday showing better than expected U.S. jobless claims figures. Initial jobless claims fell by 1,000 to 261,000 during the week of August 20th. This put pressure on the precious metal driving investors away from its safe haven properties and towards more risky investments.

The U.S. Dollar Index also put pressure on the precious metal as it rose by 0.01 percent to 94.79 as of 1700 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 fell 6.7 cents, or 0.36 percent, to close at 18.489 dollars per ounce. Platinum for October delivery dropped 5.2 dollars,or 0.48 percent, to close at 1077 dollars per ounce. Endit