Investing.com - Gold prices dropped on Monday on growing sentiment that while the U.S. economy may be sluggish, it's strong enough to stand on its own two feet and without the help of Federal Reserve monetary easing measures.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.19% at USD1,645.75 a troy ounce in U.S. trading, up from a session low of USD1,643.25 and down from a high of USD1,662.55 a troy ounce.
Gold futures were likely to test support USD1,626.05 a troy ounce, Friday's low, and resistance at USD1,695.35, Wednesday's high.
Uncertainty as to when the Federal Reserve may consider winding down its USD85 million monthly bond-buying program has sent gold prices swinging up and down in recent sessions though on Monday, investors sold the precious metal on sentiment that an end could come this year.
The minutes of the Federal Reserve's monetary policy meeting released recently revealed that most board members are debating when to wind down stimulus measures, which weaken the dollar as a side effect, as opposed to debating whether or not to add to the size of the program.
Gold and the dollar trade inversely from one another and talk of winding down monetary stimulus measures can send the metal sliding.
Meanwhile, concerns that members of the U.S. Congress may engage in brinkmanship amid debates to lift the government's debt ceiling likely in February fueled ongoing safe-haven demand for the greenback, which allowed gold to fall.
Solid unemployment data did as well.
In the U.S. on Friday, the Bureau of Labor Statistics reported the U.S. economy added 155,000 nonfarm payrolls in December, beating market calls for the economy to create 150,000 new jobs.
In addition, the U.S. employment rate remained unchanged at 7.8% last month, though markets had hoped for a decline to 7.7%.
Meanwhile, the Bureau of Labor Statistics revised October's figures to 137,000 from 138,000 new jobs and hiked November's figure to 161,000 from 146,000.
Meanwhile on the Comex, silver for March delivery was up 0.44% and trading at USD30.078 a troy ounce, while copper for March delivery was down 0.34% and trading at USD3.681 a pound.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
