Money News

Gold drops to near one-week low as dollar climbs

(Reuters) - Gold prices fell to a near one-week low on Thursday, as a stronger U.S. dollar and an uptick in risk appetite following better-than-expected economic data dented demand for the safe-haven metal.

FILE PHOTO: Gold bars at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo

Spot gold was down 0.5% to $1,933.06 per ounce by 0723 GMT, after falling to its lowest since Aug. 28 at $1,926.99 earlier in the session.

U.S. gold futures fell 0.3% to $1,939.

“Gold is tracking inversely the moves in the dollar... and part of the reason gold has not capitalised as much after Jackson Hole is risk appetite seems strong,” said DailyFx currency strategist Ilya Spivak, referring to the annual central bankers’ conference.

“Although there is positive growth, the overall economy is still very very weak in absolute terms and central banks are expected to remain dovish, which should be supportive for gold.”

The dollar index rose for a third straight session against its rivals, making gold expensive for holders of other currencies.

Recent economic data from China and the United States that bettered expectations whetted risk appetite among investors.

However, gains in stock markets were cut short after Bloomberg reported that China was planning sweeping policy changes to its semiconductor industry to fight U.S. restrictions.

The U.S. Federal Reserve, in its “Beige Book” report, highlighted that U.S. business activity and employment ticked up through late-August, but economic growth was generally sluggish as COVID-19 hotspots hampered reopening.

Gold has gained about 28% so far this year, helped by ultra-loose monetary policy adopted by major central banks to mitigate the economic damage caused by the COVID-19 outbreak.

Investors now await the initial weekly U.S. jobless claims report due later in the day, as well as U.S. payroll figures on Friday, for future direction.

Elsewhere, silver dropped 1.6% to $27.05 per ounce, platinum fell 0.2% to $903.55, while palladium gained 0.2% to $2,252.01.

Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V