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Gold drops on U.S. jobless claims data

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Shutterstock photo - - Gold prices dropped in U.S. trading on Thursday after weekly jobless claims numbers beat expectations and enticed investors out of safe-haven positions in the yellow metal and into stocks and the U.S. dollar.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,290.90 a troy ounce during U.S. trading, down 1.06%, up from a session low of $1,288.00 and off a high of $1,305.60.

The August contract settled down 0.12% at $1,304.70 on Wednesday.

Futures were likely to find support at $1,258.00 a troy ounce, the low from June 17, and resistance at $1,319.00, Monday's high.

The dollar, which tends to trade inversely with gold, firmed earlier after data revealed initial jobless claims in the U.S. fell to an eight-year low last week.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 18 declined by 19,000 to 284,000, down from the previous week's total of 303,000.

Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, and the positive numbers fueled speculation that the Federal Reserve may hike interest rates sooner than markets once anticipated.

While the Fed is seen closing its monthly bond-buying stimulus program likely in October, uncertainty as to how much time will pass from that point until rate hikes begin makes both gold and the dollar move on both positive and negative indicators.

Loose monetary policies such as rock-bottom interest rates and three rounds of Fed asset purchases have elevated gold prices since the 2008 financial crisis.

Separately, the Census Bureau reported that U.S. new home sales dropped by 8.1% to 406,000 units last month, worse than expectations for a decline of 5.3%, pointing to underlying weakness in the housing sector.

Meanwhile in Europe, upbeat factory data tarnished gold's appeal to the euro, which saw some demand despite slipping against the greenback at times.

A preliminary reading of the euro zone manufacturing purchasing managers' index rose to a two-month high of 51.9 for July, beating market calls for a 51.7 reading. The bloc's services PMI jumped to a 38-month high of 54.4, beating expectations for a 52.7 reading.

Private sector activity in Germany also expanded in July, with the country's services PMI jumping to a 37-month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.

Meanwhile, silver for September delivery was down 2.89% at $20.388 a troy ounce, while copper futures for September delivery were up 1.85% at $3.266 a pound. offers an extensive set of professional tools for the financial markets.

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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.

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