Gold down on stronger US dollar, global economic strength

Chicago, Jan 13 (IANS) Gold futures on the COMEX division of the New York Mercantile Exchange fell on Monday as the US dollar showed strength and global markets improved.

The most active gold contract for February delivery fell 11 US dollars, or 1 percent, to settle at $1,085.20 per ounce.

The precious metal came under pressure on Tuesday as European equities rebounded after a week of market turmoil. FTSE 100 Index, the British benchmark stock market gauge, Tuesday increased by 0. 98 percent, the French CAC 40 rose by 1.53 percent, and the German DAX rose by 1.63 percent.

Analysts noted that when equities post losses, the precious metal usually goes up, as investors are looking for a safe havens.

The US Dollar Index, a measure of the dollar against a basket of major currencies, rose by 0.06 to 98.88 as of 06.25 p.m.

Meanwhile, the Job Openings and Labor Turnover report released by the US Department of Labor showed that job openings were up slightly in November to 5.431 million.

Analysts say the long-term trend for gold remains strongly bearish as the Fed began the first of its interest rate hikes came in December, despite expectations for a delay until 2016.

Some analysts believe that the Fed may increase its key interest rate at the next Federal Open Market Committee (FOMC) meeting in March.

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. Until the December FOMC meeting, there had not been an increase in the Fed’s interest rate since June 2006, before the beginning of the American financial crisis.

Silver for March delivery fell 11.5 cents, or 0.83 percent, to close at 13.751 dollars per ounce. Platinum for April delivery dropped $7.7, or 0.91 percent, to close at $838.60 per ounce.

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