Investing.com - Gold futures suffered from heavy selling pressure during U.S. afternoon trade Thursday, after data indicated an improving U.S. employment picture lessening the chances for monetary easing measures..
The precious metal came under further pressure as investors piled in to the relative safety of the U.S. dollar amid mounting concerns over the global economic outlook.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,567.05 a troy ounce during U.S. afternoon trade, sliding 0.56%.
It earlier fell by as much as 1.25% to trade at USD1,556.35 a troy ounce, the lowest since June 29.
Gold futures were likely to find short-term support at USD1,551.35 a troy ounce, the low from June 29 and near-term resistance at USD1,583.05, Wednesday’s high.
Gold’s losses accelerated after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 7 fell by 26,000 to a seasonally adjusted 350,000, compared to expectations for a decline of 4,000 to 372,000.
The surprisingly strong employment data added to fading hopes over further easing from the Federal Reserve after minutes of the central bank’s June policy-setting meeting revealed that only a few board members thought that more asset purchases would be necessary.
Several other officials indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Only four Fed officials mentioned more quantitative easing in their individual forecasts, two saying they supported more easing and two saying they would consider it.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 14% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.
The Fed's minutes boosted the U.S. dollar. The euro dropped to a fresh two-year low against the greenback, while the dollar index hit its highest level since July 2010.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds in recent months, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Meanwhile, market players were looking ahead to Chinese second quarter growth figures due out on Friday, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
Fears over the global economic outlook intensified after official data Tuesday showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Traders were also jittery after the head of Italy's business group warned that Italy’s economy will shrink by more than 2.4% this year, a deeper contraction than previously expected.
Lingering concern over the deteriorating situation in Spain following Wednesday's announcement of EUR65 billion in new austerity measures also weighed.
Market analysts warned that the fresh budget cuts were likely to drag Spain’s economy deeper in to a recession.
Elsewhere on the Comex, silver for September delivery advanced 0.53% to trade at USD27.17 a troy ounce, while copper for September delivery dropped 0.64% to trade at USD3.425 a pound.
The precious metal came under further pressure as investors piled in to the relative safety of the U.S. dollar amid mounting concerns over the global economic outlook.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,567.05 a troy ounce during U.S. afternoon trade, sliding 0.56%.
It earlier fell by as much as 1.25% to trade at USD1,556.35 a troy ounce, the lowest since June 29.
Gold futures were likely to find short-term support at USD1,551.35 a troy ounce, the low from June 29 and near-term resistance at USD1,583.05, Wednesday’s high.
Gold’s losses accelerated after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 7 fell by 26,000 to a seasonally adjusted 350,000, compared to expectations for a decline of 4,000 to 372,000.
The surprisingly strong employment data added to fading hopes over further easing from the Federal Reserve after minutes of the central bank’s June policy-setting meeting revealed that only a few board members thought that more asset purchases would be necessary.
Several other officials indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Only four Fed officials mentioned more quantitative easing in their individual forecasts, two saying they supported more easing and two saying they would consider it.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 14% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.
The Fed's minutes boosted the U.S. dollar. The euro dropped to a fresh two-year low against the greenback, while the dollar index hit its highest level since July 2010.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds in recent months, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Meanwhile, market players were looking ahead to Chinese second quarter growth figures due out on Friday, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
Fears over the global economic outlook intensified after official data Tuesday showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Traders were also jittery after the head of Italy's business group warned that Italy’s economy will shrink by more than 2.4% this year, a deeper contraction than previously expected.
Lingering concern over the deteriorating situation in Spain following Wednesday's announcement of EUR65 billion in new austerity measures also weighed.
Market analysts warned that the fresh budget cuts were likely to drag Spain’s economy deeper in to a recession.
Elsewhere on the Comex, silver for September delivery advanced 0.53% to trade at USD27.17 a troy ounce, while copper for September delivery dropped 0.64% to trade at USD3.425 a pound.