Investing.com – Gold prices fell on Thursday after the dollar hit three-month highs following a slump in euro as the European Central Bank pared its bond purchases while extending its monetary stimulus programme for a period of nine-months.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell $8.20, or 0.64%, to $1,270.72 a troy ounce.
The European Central Bank announced its intention to rein in monetary stimulus, reducing its monthly purchases of bonds to €30 billion while extending its bond purchasing programme for a period of nine months through September 2018.
Although the move was widely expected, the euro came under pressure, lifting the dollar to highs, as investors weighed ECB president Mario Draghi’s comments indicating that the central bank’s bond buying programme is “open ended”, leaving the door open to a prolonged period of monetary stimulus beyond September 2018.
Gold is sensitive to moves higher in the U.S. dollar – a stronger dollar makes gold more expensive for holders of foreign currency, thus, reduces investor demand for the precious metal.
Also weighing on gold was a duo of mixed economic reports suggesting that U.S. economic growth is on track to deliver a solid quarter of gains ahead of U.S. GDP data due Friday.
Weakness in the housing sector continued as the National Association of Realtors’ pending home sales was flat in September, missing expectation of a 0.2% rise.
The U.S. Department of Labor reported Thursday that initial jobless claims increased 10,000 to a seasonally adjusted 233,000 for the week ended Oct. 21, beating forecasts of a 12,000 increase.
In other metals trading, silver futures fell 0.68% to $16.81 while platinum futures lost 0.62% to $921.00
Natural gas fell by 0.69% to $2.90, while copper traded at $3.18, down 0.16%.