Gold prices declined considerably on Thursday as the U.S. dollar gained strength and employment data had strong showing.
According to a report by Bloomberg, gold for December delivery tumbled 1.7 percent to $1,203.80 an ounce by 7:30 a.m. on the Comex in New York. The commodity reached $1,201.10 today, the lowest since Oct. 6. Additionally, the day prices on Thursday set this year's low. Bullion for immediate delivery declined 0.6 percent to $1,204.34 in London, according to Bloomberg generic pricing.
At yesterday's FOMC meeting, Fed officials dismissed concerns of a global economic slowdown that could impact the U.S. recovery. Employment gains, the strengthening U.S. dollar and the end of the Fed's easing programs cut into the precious metal's prices as investors move away from safe havens.
Additionally, Binary Tribune reported that many investors believe the Fed could increase interest rates sooner rather than later if the Fed reaches its goals of full employment and stable prices faster than estimates project.
"Quantitative easing ends in the U.S., with the FOMC appearing more positive on the economic outlook. This elicited a strong rally in the dollar and selling in gold. Movement in the dollar over the next few days could set the tone for commodities into the year end," said Daniel Hynes, Sydney-based senior commodity strategist at Australia & New Zealand Banking Group Ltd., in a note featured in Bloomberg today.
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