Gold slips to five-week low despite dollar slump
Gold prices slipped to a five-week low on Thursday, despite a slump in the dollar, as increasing expectations of a March Rate hike continued to soften demand for the yellow-metal.
Gold for April delivery on the Comex division of the New York Mercantile Exchange shed $6.35 or 0.53%, to trade at $1,202.95 a troy ounce.
Gold struggled to take advantage of a pull-back in the dollar, after initial jobless claims missed analysts’ forecasts while investors’ expectations of a March rate hike grew ahead of key non-farm payrolls report due to be released on Friday.
U.S. Department of Labor said Thursday, initial jobless claims increased by 20,000 to 243,000 in the week ending March 4 from the previous week’s total of 223,000. Analysts expected jobless claims to rise by 12,000 to 235,000 last week.
The softer initial jobless claims data came a day ahead of Friday’s nonfarm payrolls for February, viewed as a critical barometer of the U.S. economy and represents the final key economic data point ahead of the Federal Reserve’s policy meeting on March 14-15.
According to Investing.com’s Fed rate monitor tool, 90% of traders expect a rate hike in March, compared to just 80% of traders on Monday.
Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.