As the dollar increased on encouraging outlooks on the U.S. economy, gold declined to a six-week low on Thursday. It was set for its second monthly drop since May, which counteracted signals from the Federal Reserve that it is in no hurry to raise interest rates.
Amidst the U.S. jobs report on Friday, the most awaited economic data point of the month, August Comex gold dropped $5.50 at $1,289.40 an ounce. Spot gold was last quoted down $6.00 at $1,289.00 while December Comex silver slipped $0.009 at $20.65 an ounce, reports Forbes.
Commerzbank analyst Carsten Fritsch said, "The economic data catalyst was much stronger than people had anticipated today. We see underlying inflationary pressures ticking up, therefore increasing the likelihood of Fed rate hikes," according to Reuters.
The precious metal was set for a 3 percent drop for the month, even after a gain of approximately 6 percent in June, when geopolitical conflict and the Fed's reaffirmation of its commitment to accommodative measures and low rates influenced buying.
Reuters reports that the U.S. nonfarm payrolls data due on Friday is expected to show that U.S. employers added 233,000 new jobs over the past month of July.
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