Gold prices fell to a one-week low on Thursday as a stronger dollar and concerns about higher interest rates in the U.S. weighed on traders’ appetite for the haven asset.
The most actively traded contract, for December delivery, fell $9.10, or 0.8%, to settle at $1,124.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices have been hitting five-year lows in recent weeks as many traders wagered that the Federal Reserve would soon tighten monetary policy, ending a historic period of near-zero interest rates. The move would spell trouble for gold, which benefited from the U.S. central bank’s easy money stance. Gold doesn’t pay interest or dividends and has an easier time competing with assets that do, like U.S. Treasury bonds, when rates are low.
A stronger dollar, which rallied against the euro, weighed on gold prices on Thursday. The dollar rallied against the euro in response to European Central Bank comments that it stands ready to expand its stimulus measures to buttress the region’s economic growth.
Like other commodities, gold is traded in dollars and becomes more expensive for investors who use other currencies to fund their purchases of the precious metal.
Gold traders are also focusing on upcoming U.S. nonfarm payrolls data.
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