Gold plunges after strong U.S. data boosts dollar

Gold

Gold fell on Thursday following strong U.S. economic data boosted dollar and emphasized that the U.S. interest rates would be raised.

Spot gold plunged down at 0.51 percent at $1,267.76 per ounce at 2:30PM ET. U.S. gold futures settled down $3.60 at $1,273.20 for the month of December. In August, the dollar index gained subsequently after the data showed in U.S. trade deficit narrowed as exports of products and services hiked to a more than a 2-½ year-high, while the unemployed claims decreased more than expected.

Ole Hansen, the head of commodity strategy at Saxo bank in Copenhagen, said “The market is focusing on rate hikes, stock markets” He also added that a tad stronger dollar and bond yields that have been increasing in expectation of a possible tax deal and rate hike in December.

Assumption of financial tightening were also supported by the President of Philadelphia Federal Reserve Bank Patrick Harker. Greater interest rates commonly improve the dollar and aid bonds yields, increasing pressure on dollar-denominated, non-yielding gold.

Investors and waiting for additional clues on Friday from the U.S. non-farm payrolls data, with investors anticipating a decrease in new jobs due to delay and hindrance from to major hurricanes.

UBS slashed its average forecast for gold for 2017 from $1,300 to $1,270 to consider the probability of a December rate hike weighing on the market. Joni Teves(metal strategist) said “Having said this, we do not foresee an aggressive selloff either, as we expect rates to stay benign and the dollar to be broadly soft. “

Gold has rowed back approximately 6 percent since reaching $1,357.54 per ounce in early September, the max in more than a year.

Hansen said it found assistance earlier this week at the crucial technical level of $1,268. He said, “Now the market is looking for data that can solidify the sentiment that the correction if over, but so far we haven’t really seen that.”

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