Gold down sharply after dollar strengthens

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as the U.S. dollar rose sharply, putting pressure on the precious metal.

The most active gold contract for June delivery fell 21.8 U.S. dollars, or 1.75 percent, to settle at 1,226.50 dollars per ounce.

The precious metal was put under pressure as the U.S. Dollar Index rose sharply, reaching above a 95.1 level during intraday trading but is at 94.82, representing a 0.4 percent gain by 18:25 GMT.

The index is a measure of the dollar against a basket of major currencies.

Gold was put under further pressure as a report released by the U.S. Department of Labor on Thursday showed the weekly jobless claims falling by 13,000 to a 253,000 level during the week ending on April 9. Analysts note that this report was much better than expected and is a sign of strong U.S. employment.

Stronger U.S. equities also put pressure on the precious metal as the U.S. Dow Jones Industrial Average rose by 28.93 points, or 0.16 percent, as of 18:30 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.

The precious metal was prevented from falling further as a report released by the U.S. Department of Commerce on Thursday showed the consumer price index rising by a worse-than-expected 0.1 percent. Analysts note that this is a sign of soft inflation data, but is not necessarily a bad sign for the U.S. economy in the wider sense of things.

Silver for May delivery lost 15.2 cents, or 0.93 percent, to close at 16.173 dollars per ounce. Platinum for July delivery dropped 10.1 dollars, or 1.01 percent, to close at 992.90 dollars per ounce.