Investing.com – Gold prices tumbled to three week lows on Thursday, pressured by a firmer dollar as risk-on sentiment resumed amid upbeat U.S. economic data and expectations of an additional rate hike later this year.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell $18.80 or 1.47%, to $1,257.11 a troy ounce.
A raft of better than expected economic reports tapered fears the US economy was set for a slowdown in the second quarter, stoking expectations of an additional rate hike, after the Federal Reserve maintained its outlook of three total rate hikes on Wednesday.
The U.S. Department of Labor reported Thursday that initial jobless claims decreased by 5,000 to 237,000 in the week ended June 4, beating forecasts of a 3,000 decline.
On the manufacturing front, investors cheered a pair of upbeat economic reports on manufacturing activity in the states of New York and Philadelphia.
The Philly Fed said its index for current manufacturing activity in the region decreased to 27.6 in June from 38.8 in May. Analysts had expected a reading of 24.
Whereas, in New York, the Empire State manufacturing index climbed to 19.8, after falling to minus-1 in May.
Gold has fallen from yesterday’s high of $1284.20, as dollar has rebounded from its recent slump, following the Federal Reserve decision to hike rates for the second time this year, and maintain its view that a gradual increase in interest rates remained appropriate.
Gold is sensitive to moves higher in both U.S. rates and the dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
The uptick in the dollar weighed on commodities across the board as silver futures lost 2.30% to $16.746, a troy ounce while platinum futures fell by 2.80% to $925.15
Copper dipped 0.21% to $2.568, while natural gas added 3.99% to 3.050.