Gold Drops, Looks Ahead to Fed Meeting
NEW YORK (TheStreet) -- Gold prices were dropping on Thursday as a basket of global economic factors caused a choppy trade of the yellow metal.
Gold for August delivery at the COMEX division of the CME was dipping $9.90 to $1,382.10 an ounce. The gold price traded as high as $1,394.40 and as low as $1,376 an ounce, while the spot price was falling $13.58.
Gold was dipping lower in Europe's early-afternoon trading session as the U.S. dollar strengthened against the euro currency, and the precious metal dropped further in early-morning trades at the New York Mercantile Exchange as weekly jobless claims and a retail sales report printed stronger than expected.
"The latest move which can be seen -- I think it started in the early afternoon today -- is broadly due to the strengthening of the U.S. dollar, at least that's the only thing that we can see here on our screens," said Daniel Briesemann, commodities analyst at Commerzbank AG, said in a phone call from Frankfurt.
The Japanese yen surged against the greenback after the Nikkei in Tokyo tumbled 6.35%, but traders felt that Thursday's low double-digit losses weren't more than a range-bound trade.
"It's just stuck here," said Tom Vitiello, principal at Aurum Options Strategies. "Obviously when the market over there is getting hit, people may be just liquidating their positions in a lot of different
Traders also were skeptical of Thursday's downward pressure as more than a range-bound move due to the thin volume being traded on COMEX gold.
The Census Bureau reported that topline retail sales increased 0.6% in May, beating a Thomson Reuters poll of economists who were expecting a 0.4% boost. It was the strongest reading since February.
The Labor Department said weekly initial jobless claims slipped 12,000 to a less-than-expected 334,000 in the week ended June 8. Economists polled by Thomson Reuters were looking for jobless claims of 345,000.
The World Bank issued a global economic report that said it expected global gross domestic product to expand 2.2% in 2013. The report held that growth would continue to firm in advanced economies, despite widespread contraction in the eurozone.