Gold fell by more than $30 an ounce amid speculation of the timing of a rate hike by Federal Reserve.
On Thursday, Gold plummeted by more than $30 an ounce to trade below $1,200 as a result of strong U.S. economic data which has fueled speculation regarding the timing of an interest rate increase by the Federal Reserve.
Gold for June delivery, on the Comex division of NYMEX - New York Mercantile Exchange - dropped 2.49% or $30.10 to trade at 1,179.90. Meanwhile, in European afternoon trading, Gold futures rallied to session-high of $1,207.40 before plummeting after the opening of U.S. markets. The sell-off reversed the gains made on Monday where the precious metal rose by more than 2.35% to trade at 1,203.20.
Last week, gold futures either ended a trading session up or down at least 1.35% marking its volatility. From a statement released by the U.S. Department of Labor, initial jobless claims dropped by 34,000 to 262,000 for the first time in 15 years since April, 2000. The monthly average for initial jobless claims fell by 1,250 to 283,750, a figure slightly lower than that of the previous month.
In a statement released on Wednesday, the Federal Open Market Committee stated that notable improvements in the labor market are of essence before raising rates for the first time in nearly a decade.
Meanwhile, the Chicago Purchasing Managers Index (PMI) soared by 6.0 points to 52.3 from 46.3 in March. Also, new orders rose by 12.8 points to 55.1 which happen to be the highest reading since January. Earlier, analysts had predicted the index to rise to 50.0. Despite this, U.S. personal spending soared 0.4% which is slightly lower than the 0.5% gain expected. Analysts had predicted a rise of 0.2%.
The Fed, on Wednesday, opted for a more data-driven approach for the timing of an interest rate increase. To decide on the timing, the Fed will have to first consider inflationary pressures, international financial developments expectations and labor market conditions.
Elsewhere, silver and copper for July delivery recorded mixed results with silver falling by 4.04% or 0.674 to 16.032 and copper gaining 2.7% or 0.077 to 2.876 a pound.
MT4 Chart: Gold
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