Gold futures set for third weekly drop on broadly stronger dollar

Gold futures set for third weekly drop on broadly stronger dollar

Gold fell by 1 percent on Friday and seemed likely to end lower for the third week in four as comprehensive strength of the US dollar continued to weigh on demand for the metal as a safe haven.

The US dollar rose to a fresh seven-year low against the yen on Friday and held near a maximum four years versus a basket of major currency peers.

Spot gold was down 1 percent to $ 1,149.56 an ounce before trimming some losses to trade up 0.9 percent to $ 1,151.50 an ounce. It is a 2 percent for the week.

On the Comex Exchange, gold futures for December delivery was quoted at $ 1,152.50 a troy ounce during European morning trade, down 0.77%.

The December contract soaring 0.21% was set on Thursday to settle at $ 1,1161.5 troy ounce.

The metal has not recovered sharply from a low of 4-1 / 2 years $ 1131.85 hit last week, on continuing outputs from the gold-backed funds.

The greenback was kept strong support, but as the Department of Labor of the United States on Thursday said the number of individuals presenting for initial jobless benefits increased by 12,000 last week to 290,000. Analysts were expecting jobless claims rise by 4000 to 282,000 last week.

Comex Gold prices have come under heavy selling pressure the last few weeks amid speculation that the Federal Reserve is being moved closer to raise interest rates for the first time in eight years after finishing his program of buying bond monthly base, also known as quantitative easing last month.

Gold, which does not produce anything and it costs money to sustain, is seen as a less attractive investment in times of increasing interest rates.

 The downward tendency in bullion perspective was reflected holdings of SPDR Gold Trust.

Portfolio shares fell 0.3 percent to 720.62 tonnes on Thursday – eighth straight day of declines and a low of six years.

“A steadily decline is increasing in Gold and silver. The dollar index is maintained at a height of 4.5 years. And dollar is at 7 years peek of against the yen. The strengthening of the dollar to gold and silver have been battered. In China, demand for gold has declined 2 per cent in the third quarter. Global demand is at 5-year low. But 39 per cent increase in demand in the Indian domestic market.”  100McxTips bullion experts said.

Traders were also following the evolution over No. 2 consumer of gold in India, where authorities under consideration restrictions on gold imports.

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