NEW YORK: Gold prices declined on Wednesday as weaker-than-expected US weekly jobless claims data boosted the dollar, while US President Donald Trump’s moderated tone on Iran further weighed on safe-haven demand for the metal.
Spot gold was down 0.3percent at USD4,607.59 per ounce, as of 09:32 a.m. ET (1432 GMT). Bullion hit a record USD4,642.72 on Wednesday. US gold futures for February delivery fell 0.5percent to USD4,612.50. Data showed new applications for US unemployment benefits unexpectedly fell last week, pushing the dollar index to its highest level since December 2 and making bullion more expensive for overseas buyers.
“Recent data sort of keeps expectations towards a Fed on hold perhaps for the first half of the year, so the dollar index is at a multi-week high and that’s providing a bit of a headwind for gold at this point,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Trump said on Wednesday he has no plans to fire Jerome Powell despite a Justice Department criminal investigation into the Federal Reserve chair, but it was “too early” to say what he would ultimately do. The Federal Reserve is broadly expected to maintain interest rates at its January 27-28 meeting, despite Trump’s calls for cuts. Markets, however, anticipate at least two 25-basis-point rate reductions later in the year.
Trump also said he had been told that killings in Iran’s crackdown on protests appeared to be easing and saw no immediate plan for large-scale executions, signalling a wait-and-see approach after earlier threats of intervention.
Grant said easing geopolitical tensions had slightly weighed on prices, but viewed gold’s move as corrective and expected traders to treat downticks as buying opportunities.
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