Investing.com - Gold prices fell back below the psychologically important $1,200 level on Thursday, pressured lower by the stronger dollar, which bounced on expectations for higher U.S. interest rates and rising trade tensions.
December gold futures hit a low of $1,192.70 and were down 0.42% at $1,198.20 by 08:46 AM ET (12:46 GMT) on the Comex division of the New York Mercantile Exchange.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.34% to 95.32, snapping six days of losses.
The index hit a low of 94.83 the previous day, its lowest since August 8.
The dollar was boosted after the latest Federal Reserve meeting minutes indicated that further interest rate hikes are in the pipeline.
Fed policymakers said they continued to expect the U.S. economy to expand at an above-trend pace.
The minutes also showed that officials discussed how global trade disputes could affect businesses and households.
The Fed has raised rates twice this year and is expected to raise rates again next month and one more time this year.
Demand for the dollar was also boosted by a fresh escalation in the U.S.-China trade war and worries over U.S. President Donald Trump’s political standing following the criminal convictions this week of two of his former associates.
Another round of U.S. tariffs on $16 billion in Chinese goods went into effect on Thursday. Beijing was quick to respond with promises to file a new complaint with the World Trade Organization and retaliatory tariffs for the same amount.
The tit-for-tat trade spat between the world’s two largest economies continues even as representatives from both countries are engaged in low-level talks in the U.S.
Earlier this week, Trump played down the prospects of any imminent success from the discussions, saying that he didn’t “anticipate much” of an outcome.
Investors were looking ahead to a meeting of global central bankers in Jackson Hole, Wyo. kicking off later Thursday, with Jerome Powell due to address attendees in a speech Friday.
The greenback’s strength continued to offset the safe-haven appeal of the yellow metal. A stronger U.S. currency makes gold and other dollar-denominated commodities more expensive for foreign investors.
Weakness in gold also weighed down other metals, with silver falling 0.81% to $14.630 a troy ounce. October platinum was trading at $783.90, off 1.23% for the day.
Among base metals, September copper was down 1.4% at $2.636.