Investing.com - Gold futures fell to an eight-month low on Thursday, as investors digested a mixed bag of U.S. economic data and following fresh guidance from the Federal Reserve on its plans to raise interest rates.
On the Comex division of the New York Mercantile Exchange, gold for December delivery lost as much as $19.30 to hit a daily low of $1,216.60 a troy ounce, a level not seen since January 2.
Prices recovered to last trade at $1,221.10 during U.S. morning hours, down $14.80, or 1.2%. A day earlier, gold prices shed 80 cents, or 0.06%, to settle at $1,235.90.
Futures were likely to find support at $1,204.30, the low from January 2 and resistance at $1,240.10, the high from September 17.
The U.S. Department of Labor said earlier that the number of people who filed for unemployment assistance in the U.S. last week fell by 36,000 to 280,000, the lowest level since mid-July.
Analysts had expected jobless claims to fall by 11,000 to 305,000 last week.
At the same time, the U.S. Commerce Department said that the number of building permits issued last month dropped by 5.6% to 998,000 units from July’s total of 1.057 million.
Analysts expected building permits to fall by 0.4% to 1.045 million units in August.
The report also showed that U.S. housing starts tumbled by 14.4% last month to hit a seasonally adjusted 956,000 units from July’s total of 1.117 million units, compared to expectations for an increase to 1.040 million.
A stronger dollar has also kept pressure on gold and other commodities priced in the currency. The greenback rose to its highest level in six years against the yen USD/JPY, while the euro EUR/USD slid to fresh 14-month lows after the Fed brought forward its outlook for rising interest rates.
For the end of 2015, the median forecast was 1.375% compared to a June forecast of 1.125%.
The U.S. central bank cut its monthly bond-buying program by another $10 billion following its two-day policy meeting on Wednesday, keeping the program on track to finish next month.
Markets interpreted the Fed's statement as hawkish, despite policymakers maintaining language suggesting that rate hikes would not happen for a "considerable time."
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Speaking at the central bank’s post-policy meeting press conference, Fed Chair Janet Yellen emphasized that the timing of the first rate hike would be data-dependent.
Investors were also looking ahead to Thursday's independence vote in Scotland, with polls currently show that the referendum is too close to call. A win for the "Yes" campaign could result in the break-up of the United Kingdom.
Also on the Comex, silver for December delivery shed 32.6 cents, or 1.74%, to trade at $18.40 a troy ounce, the lowest since June 28, 2013.
Elsewhere in metals trading, copper for December delivery lost 4.3 cents, or 1.37%, to trade at $3.100 a pound.
Data released earlier showed that new home prices in China rose at annualized rate of 0.5% in August, below expectations for a gain of 2.3% and slowing from July's 2.5% increase.
On a monthly basis, prices fell 0.6%, their fourth consecutive decline, fuelling concerns about the health of the real-estate market.
China is the world's largest copper consumer, accounting for nearly 40% of global demand.