Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as positive U. S. data increased trader speculations for a December rate hike. The most active gold contract for December delivery fell 3.9 U. S. dollars, or 0.36 percent, to settle at 1,081.00 dollars per ounce.
Gold was put under pressure as signs of strength emerged from U. S. economic data reports on Thursday. In the week ending Nov. 7, the advance figure for seasonally adjusted initial claims was 276,000, unchanged from the previous week's unrevised level, said the U.S. Labor Department Thursday.
The four-week moving average was 267,750, an increase of 5,000 from the previous week's unrevised average of 262,750, but still held to the lowest level in years. In a separate report, the department reported that the number of job openings was little changed at 5.5 million on the last business day of September.
The job openings rate for September was 3.7 percent. Analysts believe this will likely be a point of discussion during the December Federal Open Market Committee (FOMC) meeting, as decreasing amounts of supply in the labor market is likely to lead to wage inflation.
Inflation is one of the U.S. Federal Reserve's primary concerns, in addition to unemployment, which has been holding steady near 5 percent, which indicates full employment. Both reports, considered as encouraging signs for the Federal Reserve, put pressure on the precious metal as traders continue to price in the expectation for a December rate hike.
According to the CMEGroup's Fedwatch tool, the current implied probability of a hike in December is at its highest ever, at 70 percent. Coupled with weak physical demand, analysts believe this puts both long term and short term pressure on the precious metal.
Expectations were originally for a delay in the rate hike until 2016 but the FOMC meeting in late October left the door open for the Fed to raise rates before the end of 2015. An increase in the Fed's interest rate drives investors away from gold and towards assets with a return, as the precious metal bears no interest.
The Fed has not hiked its benchmark rate in nearly 10 years, and it's been near zero since the 2008 financial crisis. Silver for December delivery fell 3.8 cents, or 0.27 percent, to close at 14.225 dollars per ounce. Platinum for January delivery dropped 6.2 dollars, or 0.70 percent, to close at 876.90 dollars per ounce.
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