Investing.com – Gold prices dropped to two-month lows on Thursday, as the release of upbeat U.S. jobless claims data lent further support to the greenback amid growing expectations for more aggressive rate hikes by the Federal Reserve than previously thought.
Comex were down 0.82% at $1,307.00 a troy ounce by 08:45 a.m. ET (12:45 GMT), the lowest level since January 2.
The greenback was boosted after data on Thursday showed that U.S. jobless claims dropped to last week.
The U.S. dollar was already broadly supported after Fed Chair Jerome Powell that the U.S. central bank would likely move forward with gradual increases in interest rates.
“The economic outlook remains strong,” he said. “Further gradual increases in the federal funds rate will best promote attainment of both of our objectives.”
Powell was speaking at his first semi-annual monetary policy testimony to the House Financial Services Committee since taking over the helm of Fed earlier this month.
Market participants were looking ahead to the second part of Powell’s testimony before the Senate Banking Committee due later Thursday.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% at 90.74, the highest since Januayr 18.
Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, lost 1.19% to $16.13 a troy ounce.
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Source: Investing.com
