The price of gold was dragged away from its seven-week-highs by a much stronger dollar on Thursday. The greenback was reinforced by expectations that Fed is likely to cut its bond portfolio this coming September.
U.S. Federal Reserve President in San Francisco John Williams said last Wednesday that the economy will be strong enough for the Fed to trim its holdings next month in an indication that the central bank is almost there in terms of winding down a stimulus tool. Loretta Mester, Fed President in Cleveland, said on the same day that Fed should not overreact to the poor inflation since figures will be released before the policy meeting next month.
Meanwhile on the price of gold, U.S. gold futures fell more than 0.8 percent to trade at $1,268.70 an ounce for its December delivery and spot gold dropped by 0.3 percent to finish at $1,262.40 an ounce.
A stronger dollar is proven to be negative for the yellow metal because it will make the non-yielding bullion expensive for holders outside the United States, which further lessen the demand. The index which measures the value of the greenback against its major opposing currencies, the U.S. dollar index, was 0.1 percent higher at 92.940.
In other news, according to U.S. employment data, the nation added as much as 178,000 jobs for July; released numbers came in lower than expected according to some economists. U.S. President Donald Trump hesitantly signed new sanctions against Russia. Moscow said that this movement resulted to full-scale “trade war”.