Investing.com - Gold prices were wallowing at one-week lows on Thursday, after sharp falls in the previous session on a rally in the dollar after data showing faster U.S. economic growth and hopes for a diplomatic breakthrough with North Korea.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange slid $1.3 or 0.1% to $1,323.30 a troy ounce by 04:27 AM ET (08:27 AM GMT) after ending Wednesday’s session down 1.3%.
The dollar was boosted after data on Wednesday showing that the U.S. economy grew by a larger than initially estimated 2.9% in the fourth quarter.
The data left the way clear for a slightly more aggressive pace of interest rates hikes by the Federal Reserve this year. The Fed hiked rates for the first time this year last week and stuck to its projection for three rate hikes this year.
The U.S. currency received an additional boost after China said on Wednesday that North Korea's leader Kim Jong Un had pledged his commitment to denuclearization while U.S. President Donald Trump tweeted that Kim looked forward to meeting with him.
The developments prompted speculation that a breakthrough over North Korea's nuclear program could be growing closer.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed near a one-week high of 89.71. The index rose 0.88% on Wednesday.
The stronger dollar pressured gold, which is denominated in the U.S. currency and becomes less affordable for holders of other currencies when the dollar rises.
Investors were looking ahead to U.S. consumption and price data later in the day, which will be closely watched for indications on the possible direction of monetary policy.
In other precious metal trade, silver futures were down 0.17% at $16.225 a troy ounce, while platinum futures were little changed at $940.70.
Among base metals, copper futures were up 0.53% to $3.018 a pound, up from Monday’s three-month lows of $2.938.
Worries over recent weak economic data out of China, the world’s largest copper consumer, and concerns over trade tensions had pressured prices to their weakest levels since December after they hit a nearly four-year high late last year.