Gold down on stronger US dollar and mixed US data

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday on mixed U.S. economic data and a stronger U.S. dollar.

The most active gold contract for February delivery fell 0.8 U.S. dollars, or 0.07 percent, to settle at 1,212.10 dollars per ounce.

Gold was put under pressure as the U.S. Dollar Index rose by 0.49 percent to 100.79 as of 17: 00 GMT. The index is a measure of the dollar against a basket of major currencies.

Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The precious metal was given support as the U.S. Dow Jones Industrial Average fell by 52.55 points, or 0.27 percent as of 17: 00 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

A report released on Wednesday by the U.S. Department of Labor showed the consumer price index increasing by 0.3 percent during the month of December, which is a 2.1 percent increase from the same period last year. Analysts note that this report was on the lower end of expectations, but is within the consensus range and as a result is likely to only give minor support to the precious metal.

Gold was given some support as the U.S. Federal Reserve released its industrial production report on Wednesday showed production increasing by 0.8 percent during the month of December and manufacturing increasing by 0.2 percent during the month. Analysts note that the manufacturing measure was weaker than expected, which is what gave support to the precious metal.

In addition to the reports released on Wednesday, housing starts, weekly jobless claims, and Philadelphia Fed business outlook reports are due on Thursday, and no economic reports are expected on Friday.

Silver for March delivery rose 12.6 cents, or 0.73 percent, to close at 17.274 dollars per ounce. Platinum for April delivery fell 11.2 dollars, or 1.14 percent, to close at 971.90 dollars per ounce.

source: Xinhua