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- Gold declines more than 1%
Gold declines more than 1%
Gold price dropped on a stronger U.S. dollar. The U.S. dollar was supported by the Fed's interest rate hike. The Fed on Wednesday raised its interest rate to the range 0.25% - 0.50% from 0.00% - 0.25% as widely expected by analysts. All Federal Open Market Committee (FOMC) members voted for the interest rate hike. The Fed repeated that further interest rate hikes will be gradual.
Gold is traded in U.S. dollars. It suffers when the U.S. dollar strengthens, becoming more expensive for holders of other currencies.
The U.S. economic data also weighed on gold price. The U.S. Labor Department released its jobless claims figures on Thursday. The number of initial jobless claims in the week ending December 12 in the U.S. declined by 11,000 to 271,000 from 282,000 in the previous week. Analysts had expected jobless claims to fall to 275,000.
Jobless claims remained below 300,000 the 41st straight week. This threshold is associated with the strengthening of the labour market.
January futures for gold on the COMEX today traded at 1050.80 dollars per ounce.
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