Gold futures were marginally softer early Thursday after ending the previous session at a two-month low, as a surging U.S. dollar keeps pressure on the precious metal and other commodities.
Gold briefly ticked higher in choppy trade after data showed the U.S. economy contracted in the first quarter.
Gold for June delivery
fell $5.60, or 0.3%, to $1,883.10 an ounce on Comex after ending Wednesday at its lowest since late February. May silver
was down 47 cents, or 2%, at $23.035 an ounce.
The U.S. economy shrank at a 1.4% annualized pace in the first quarter. But the decline mostly stemmed from a record international trade deficit, lower government spending and declining inventories, while robust consumer spending and businesses investment signaled the economy was still steadily expanding.
Gold, meanwhile, was still struggling with headwinds provided by the U.S. dollar.
“The gold price has slid this morning to a 2-1/2-month low…because the U.S. dollar has further appreciated,” said Daniel Briesemann, analyst at Commerzbank, in a note.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, rose to a five-year high as the Japanese yen
plunged after the Bank of Japan pledged to buy unlimited amounts of 10-year fixed-rate Japanese Government Bonds to defend a 0.25% yield level. The euro
also remained under pressure, slipping below $1.05 for the first time in five years.
A stronger dollar makes it more expensive to users of other currencies to buy dollar-priced commodities.