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Gold down on stronger U.S. dollar

Xinhua, January 20, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday on strong U.S. economic data and a stronger U.S. dollar, despite weaker U.S. equities.

The most active gold contract for February delivery fell 10.6 U.S. dollars, or 0.87 percent, to settle at 1,201.50 dollars per ounce.

The housing starts report released by the U.S. Census Department on Thursday showed starts increasing to a seasonally adjusted 1.226 million level during the month of December, and permits increasing to a 1.210 million level during the month. Analysts note that the housing starts measure was higher than the expected consensus but still within the consensus range, which likely put slight pressure on gold.

Gold was put under further pressure as the U.S. Department of Labor released its weekly jobless claims report for the week of January 14th, which showed initial jobless claims falling by 15,000 to a 234,000 level, a figure which was much better-than-expected and is far outside of the consensus range. Analysts believe that this put extensive pressure on gold and that it will likely raise expectations for the January big jobs report.

The precious metal was put under pressure as the Philadelphia Federal Reserve released a report on Thursday showing its general business conditions index reaching a 23.6 level, far above the consensus range. Analysts note that this is the best reading of this measure since November 2014, and likely put extensive pressure on gold.

The U.S. Dollar Index rose by 0.05 percent to 101.34 as of 1830 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 given a slight amount of support as the U.S. Dow Jones Industrial Average fell by 109.40 points, or 0.55 as of 1830 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.

Silver for March delivery fell 27.2 cents, or 1.57 percent, to close at 17.002 dollars per ounce. Platinum for April delivery fell 15.5 dollars, or 1.59 percent, to close at 956.40 dollars per ounce. Endit