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Gold futures drop on stronger U.S. dollar, rate-hike expectations

Xinhua, May 9, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell as strength in the dollar and growing expectations for a U.S. interest-rate hike next month dulled demand for the metal.

The most active gold contract for June delivery fell 11 U.S. dollars, or 0.9 percent, to settle at 1,216.10 dollars per ounce.

As measured by the U.S. Dollar Index, the dollar was up 0.5 percent at 99.592 as of 1830 GMT. A stronger buck makes commodities priced in the currency, like gold, less attractive to buyers using weaker monetary units.

Investors have been increasingly pricing in a U.S. rate increase next month, with fed-funds futures recently showing that markets are pricing in an 88 percent chance of a rate increase at the Fed's mid-June meeting, according to data of Chicago Mercantile Exchange. Higher rates can make precious metals, which don't offer a yield, less appealing.

Silver for July delivery dropped 19.1 cents, or 1.17 percent, to close at 16.067 dollars per ounce. Platinum for July delivery fell 18.7 dollars, or 2.03 percent, to close at 900.9 dollars per ounce. Enditem