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Gold futures fall on stronger U.S. dollar, equities

Xinhua, February 10, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as the U.S. dollar, U.S. equities, and U.S. economic data all showed strength.

The most active gold contract for March delivery fell 2.7 U.S. dollars, or 0.22 percent, to settle at 1,236.80 dollars per ounce.

Gold was kept at low levels as the U.S. Dow Jones Industrial Average rose by 138.42 points, or 0.69 percent as of 1745 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.

The precious metal was put under pressure as the U.S. Dollar Index rose by 0.41 percent to 100.58 as of 1745 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 pressure as the weekly jobless claims report released by the U.S. Department of Labor on Thursday showed new claims falling by 12,000 to a 234,000 level, a figure which analysts note was far better-than-expected and below even the most optimistic estimates of the consensus range.

Additionally, St. Louis Federal Reserve Bank President James Bullard spoke at Washington University in St. Louis, Missouri, at the beginning of the trading day. Bullard indicated that he believes that the interest rate can remain low throughout 2017.

Investors believe the Fed may raise rates from 0.75 to 1.00 during the May FOMC meeting at the earliest. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 9 percent at the March meeting and 28 percent for the May meeting.

Silver for March delivery rose 3.6 cents, or 0.20 percent, to close at 17.741 dollars per ounce. Platinum for April delivery added 2.8 dollars, or 0.27 percent, to close at 1,022.20 dollars per ounce. Enditem