Investing.com - Gold prices fell on Thursday after a string of U.S. economic indicators came in mixed but strong enough to convince investors that the Federal Reserve remains on track to wind down stimulus measures that have supported the yellow metal for years.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at 1,296.00 a troy ounce during U.S. trading, down 0.76%, up from a session low of $1,291.10 and off a high of $1,307.30.
The June contract settled up 0.86% at $1,305.90 on Wednesday.
Futures were likely to find support at $1,278.30 a troy ounce, Monday's low, and resistance at $1,309.10, Wednesday's high.
A mixed bag of data that dampened Wall Street and currency markets failed to convince metals markets that the Federal Reserve will rethink the pace at which it dismantles its monthly bond-buying program.
The Federal Reserve Bank of Philadelphia said its manufacturing index ticked down to 15.4 this month from 16.6 in April, better than expectations for a 14.0 reading.
The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 10 fell by 24,000 to 297,000 from the previous week's revised total of 321,000. Analysts had expected jobless claims to fall by 1,000 to 320,000 last week.
Elsewhere, the New York Fed said its manufacturing index climbed to a two-plus-year high of 19.01 in May from a reading of 1.29 in April, far surpassing market calls for a rise to 5.00 this month.
On the other hand, U.S. industrial production dropped 0.6% last month, confounding expectations for a 0.1% rise. March's figure was revised up to a 0.9% increase from a previously estimated 0.7% gain.
U.S consumer inflation rates came in better than expected as well, though concerns arose after investors digested the numbers.
The Bureau of Labor Statistics reported earlier that the U.S. consumer price index rose to 0.3% in April from 0.2% in March, in line with market expectations.
The U.S. core consumer price index, which excludes food and energy items, rose by 0.2% last month, more than the expected 0.1% uptick, after a 0.2% gain in March.
On Thursday, however, the producer price index came in much better than expected, and the consumer inflation rate's inability to maintain the same pace as its wholesale counterpart softened the dollar somewhat by stoking concerns surrounding the strength of U.S. demand for goods and services.
The U.S. producer price index increased by 0.6% last month, beating forecasts for a 0.2% gain, after rising 0.5% in March.
The core producer price index advanced 0.5% last month, compared to expectations for a 0.2% increase, after rising 0.6% in March.
The Federal Reserve views core prices as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.
Gold prices have remain elevated in the U.S. over the last several years due to Fed stimulus programs, which weaken the dollar to spur recovery, making the precious metal an attractive hedge.
The Fed is currently buying $45 billion in Treasury and mortgage debt a month to suppress long-term interest rates to kick-start the economy.
The U.S. central bank is widely seen closing the program this year and hiking benchmark interest rates some time next year.
Meanwhile, silver for July delivery was down 1.34% at $19.510 a troy ounce, while copper futures for July delivery were down 0.58% at $3.142 a pound.
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