Gold Futures Fail To Hold Early Gains, Extends Losses To 6th Straight Day

Gold prices drifted lower on Thursday, losing for a sixth straight session, as riskier assets such as equities rebounded after suffering a severe setback in the previous session.

The dollar’s retreat after early strength helped limit bullion’s downside. The dollar index, which advanced to 90.86 in the European session, subsequently fell below the flat line and was last seen at 90.44, down 0.25% from previous close.

Gold futures for April ended down $7.70 or about 0.4% at $1,841.20 an ounce after hitting a high of $1,862.90 an ounce earlier in the day.

Silver futures for March ended higher by $0.533 at $25.922 an ounce, while Copper futures for March settled at $3.5780 per pound, gaining $0.0205.

Gold gained in strength earlier in the day, as the Federal Reserve left its benchmark interest rate unchanged, as widely expected, on Wednesday. The central bank also pledged to keep buying Treasury and mortgage bonds to restrain longer-term borrowing rates and support the economy.

The Fed reiterated that it would keep its low interest rate policies in place even well after the economy has sustained a recovery from the viral pandemic.

Warning about the risks to the economic outlook, Fed officials removed a phrase from their previous statement that had said the risks were “over the medium term.”

In economic news today, data from the Labor Department showed initial jobless claims fell to 847,000 in the week ended January 23rd, a decrease of 67,000 from the previous week’s revised level of 914,000.

Economists had expected jobless claims to drop to 875,000 from the 900,000 originally reported for the previous week.

A report from the Commerce Department said real gross domestic product jumped by 4% in the fourth quarter after skyrocketing by 33.4% in the third quarter.

Despite the rebound in the second half of the year, GDP for 2020 contracted by 3.5% following the 2.2% growth seen in 2019.

A separate report from the Commerce Department showed new home sales in the U.S. rebounded in the month of December after falling for four consecutive months.

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