New claims for jobless benefits rose less than expected last week in the United States, while the economy recovered faster in the third quarter, rising 3.2% versus 2.9% previously estimated.
“Gold fell as the US economy continues to show resilience, which could allow the Fed to tighten much more than the market is pricing in.”said Edward Moya, a senior analyst at OANDA.
The dollar index rose 0.4%, making precious metals a bit more expensive for holders of other currencies.
Gold has risen about $200 since falling to more than two-year lows in late September as expectations of a slower Fed rate hike lessened the dollar’s allure.
European Central Bank officials Luis de Guindos and Yannis Stournaras joined a chorus of euro zone central bankers backing further interest rate hikes at the pace of last week’s rise to rein in inflation.
Although bullion is considered a hedge against inflation, rising interest rates reduce its appeal.
Among other precious metals, spot silver was down 2.3% at $23.41 an ounce, platinum was down 2% at $977.96 and palladium was down 1% at $1,675.65.
Source: Ambito
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