Investing.com - Gold prices inched down on Thursday as the dollar strengthened on positive U.S. economic data. Rising U.S. Treasury yields were also cited as headwind for the precious metal.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange was down 0.08% to $1,201.90 a troy ounce by 1:50AM ET (05:50 GMT).
“Gold remains heavy due to strong U.S. economic data which supports the emerging hawkish Fed narrative, underpinning the dollar sentiment,” said Stephen Innes, APAC trading head at OANDA in Singapore.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, last traded at 95.76, up 0.09%.
Data on Wednesday showed that U.S. service sector activity accelerated to a 21-year high in September and another report showed that private sector hiring increased at the fastest pace in seven months in September.
"A simple dynamic is playing out in the global economy right now - the U.S. is booming, while most of the rest of the world slows or even stagnates," said HSBC economist Kevin Logan.
The yield on the United States 10-Year Treasuries rose to the highest level since 2011 on the positive data.
Meanwhile, Federal Reserve Chairman Jerome Powell said in a speech in Boston on Wednesday that the economic outlook was "remarkably positive" and that rates might rise above "neutral", currently anywhere from 2.5 to 3%.
Higher interest rates increase bond yields, making non-interest bearing gold less attractive to investors. They also tend to boost the dollar, making dollar-priced gold more expensive for holders of other currencies.