Investing.com – Gold prices fell on Thursday, as testimony from former FBI Director James Comey to the Senate Committee was less controversial than many had feared, easing investor concerns about a sharp rise in U.S. political turmoil which dampened demand for safe havens.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange fell $11.41 or 0.89%, to $1,281.81 a troy ounce.
Investors were relieved as former FBI Director James Comey’s public testimony to the Senate Committee offered little to spark further political turmoil in Washington, after he confirmed that President Donald Trump was not directly under investigation at the time he was fired.
Mr Comey’s testimony overshadowed economic data, showing U.S. initial jobless claims fell by less than expected.
The U.S. Department of Labor reported that initial jobless claims decreased by 10,000 to 245,000 in the week ended June 3, below forecasts of a 15,000 decline.
Meanwhile in Europe, the European Central Bank (ECB) lowered Eurozone inflation expectations for the next two years, and said policymakers had not discussed tapering its massive bond buying programme.
At a press conference after the ECB issued its decision to keep interest unchanged, ECB President Mario Draghi said interest rates were likely to remain at current levels for “an extended period of time”.
The dovish comments from Mr Draghi weighed on the euro, lifting the dollar higher, which dampened demand for the precious metal.
Dollar-denominated commodities such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand.
Additional volatility is expected in gold prices later during the session as the UK election gets underway.
Voting polls close at 22:00 BST/ 17:00 EDT and British broadcasters will publish their joint BBC/ITV/Sky exit poll, which has a track record of coming nearer to the actual result than preceding opinion surveys.
In other precious metals, silver futures fell by 1.29% to $17.393 a troy ounce while platinum futures lost 0.84% to trade at $939.60.
Copper added 2.41% to $2.613, while natural gas rose 0.33% to 3.030.