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Gold futures fall as firm dollar limits gains

Xinhua, March 30, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell Wednesday for a second straight session, adding to their decline from the one-month high they hit at the start of the week as the U.S. dollar strengthened on the back of Brexit-induced weakness in the euro.

The most active gold contract for April delivery fell 1.9 U.S. dollars, or 0.15 percent, to settle at 1,253.70 dollars per ounce.

The U.S. Dollar Index, rose 0.3% to trade above 100 as of 19:00 GMT. U.S. equities saw mixed trading after the Dow industrials on Tuesday snapped an eight-day losing streak.

The dollar index is back above 100, and gold is firm above 1,250 dollars, said Peter Spina, president and chief executive officer of GoldSeek.com.

The yellow metal fell Wednesday as the U.K. government letter formally starting the Brexit process was delivered to the European Council, kicking off two years of negotiations.

Brexit weakens the euro's appeal, said Spina. "The uncertainty within the EU has grown and nationalistic trends which, along with the economic issues, make the U.S. dollar a lot more appealing." Strength in the dollar can pressure prices for dollar-denominated commodities such as gold.

Meanwhile, metals traders will continue to eye U.S. economic data for hints on the pace and timing of interest-rate hikes by the Federal Reserve.

Chicago Fed President Charles Evans said Wednesday he supported one or two more U.S. rate hikes this year. The prospect of higher rates undercuts gold, which doesn' t offer a yield, in favor of other investments.

Silver for May delivery stayed unchanged at 18.252 dollars per ounce. Platinum for April delivery fell 4.9 dollars, or 0.51 percent, to close at 952.50 dollars per ounce. Endit