By Deep Kaushik Vakil
(Reuters) – Gold extended declines on Thursday after more strong economic readings from the U.S. further soured bets that the Federal Reserve may ease up on interest rates hikes, with safe-haven bullion also pressured by optimism for a debt deal.
Spot gold fell 1.1% to $1,959.79 per ounce by 10:04 a.m. EDT (1404 GMT), after earlier touching its lowest since April 3 at $1,956.20.
U.S. gold futures were 1.1% lower at $1,963.00.
A lower-than-expected number of new U.S. jobless claims last week was accompanied by a milder fall in a business index from the Philadelphia Fed.
Along with a relatively vibrant jobs markets, some optimism over the debt ceiling negotiations has also strengthened the dollar, denting the need for safe havens a bit, said David Meger, director of metals trading at High Ridge Futures.
“We’re no longer as positive on the gold market as we’ve been for really several months.”
Pressuring gold, the dollar and 10-year Treasury yields climbed to multi-week peaks after the economic data, with markets now pricing in a 20% chance of another interest rate hike in June, compared with 20% bets of a cut around a month ago. [USD/] [US/]
Non-yielding bullion suffers when higher rates boost returns on competing assets like bonds.
Dallas Fed President Lorie Logan said inflation is not cooling fast enough yet to allow the Fed to pause rate hikes in June, while Fed Governor Philip Jefferson said it was too early to judge the full impact of the rapid increases so far.
Both sit on the Fed committee that sets monetary policy.
“Gold’s failure to hold technical support at the 50-day moving average will likely encourage further tests of the downside,” said independent analyst Ross Norman.
Silver dipped 0.9% to $23.50 per ounce, platinum was down 0.6% to $1,062.01 while palladium was also down 1.8% to $1,461.10.
(Reporting by Deep Vakil and Kavya Guduru in Bengaluru; Editing by Simon Cameron-Moore and Sharon Singleton)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.