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Gold down on strong U.S. data, European reassurance

Xinhua, September 9, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as strong U.S. jobless data and reassurance from the European Central Bank (ECB) eased investor fears.

The most active gold contract for December delivery fell 7.6 U.S. dollars, or 0.56 percent, to settle at 1,341.6 dollars per ounce.

Gold was put under pressure as the U.S. Department of Labor released its weekly jobless claims report on Thursday, showing initial jobless claims falling by 4,000 to 259,000 during the week of September 3rd. Analysts note that this figure was better-than-expected and is a sign of a consistently healthy labor market.

The precious metal was put under further pressure after the ECB signaled no changes likely on its quantitative easing program, with ECB President Mario Draghi hinting to investors that their expectations were too high for additional quantitative easing.

Strength in the U.S. dollar also put pressure on the precious metal as the U.S. Dollar Index rose by 0.09 to 95.05 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.

Analysts believe that traders are looking ahead to the Federal Open Market Committee (FOMC) meeting later in September for hints on where the U.S. Fed will put its key interest rate.

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 24 percent at the September 2016 meeting, 29 percent at the November 2016 meeting, and 59 percent at the December meeting.

Silver for December delivery dropped 17 cents, or 0.86 percent, to close at 19.678 dollars per ounce. Platinum for October delivery fell 8.1 dollars, or 0.74 percent, to close at 1,084.7 dollars per ounce. Enditem