Gold down on technical trading, stronger US dollar

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday as technical trading and a stronger U.S. dollar put pressure on the precious metal.

The most active gold contract for December delivery fell 10.6 U.S. dollars, or 0.8 percent, to settle at 1,316.5 dollars per ounce.

Gold fell on Tuesday after two days of gains, despite hawkish remarks from U.S. Federal Reserve Chairwoman Janet Yellen. Analysts note that hawkish remarks normally piled pressure on the precious metal, as increased interest rates drive investors away from non-interest bearing assets such as gold, however in this particular case, market forces drove gold upwards and as of Tuesday, the precious metal is finally normalizing its trend.

Investors are waiting for the release of several major economic data that will likely indicate the Fed's policy direction during their September FOMC meeting in a couple weeks. The weekly jobless claims report is due on Thursday and the big jobs report is due on Friday, along with international trade.

Janet Yellen said she would be open to a rate hike as early as next month and traders continue to believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting. According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 27 percent at the September 2016 meeting, 33 percent at the November 2016 meeting, and 55 percent at the December meeting.

Strength in the U.S. dollar also put pressure on the precious metal as the U.S. Dollar Index rose by 0.52 percent to 96.06 as of 1900 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Silver for December delivery fell 18.6 cents, or 0.99 percent, to close at 18.673 dollars per ounce. Platinum for October delivery dropped 24.5 dollars, or 2.27 percent, to close at 1,056.6 dollars per ounce.

Source : XINHUA