By Kate Gibson and V. Phani Kumar, MarketWatch
NEW YORK (MarketWatch) — Gold prices fell sharply Thursday as the U.S. dollar strengthened after the Federal Reserve refrained from providing a big stimulus.
U.S. economic data had weekly jobless claims sliding by 2,000 last week.
Data still to come include the Philadelphia Fed’s factory index for June and May existing-home sales and leading economic indicators due for release at 10 a.m. Eastern.
Gold futures for delivery in August GCQ2 -1.85% dropped $27.80, or 1.7%, to $1,588 an ounce. The contract fell $7.40 on the Comex division of the New York Mercantile Exchange on Wednesday.
The ICE dollar index DXY +0.27% , which measures the greenback’s performance against a basket of six major currencies, climbed to 81.762 from 81.567.
After a two-day meeting ended Wednesday, the Federal Open Market Committee said it will extend a program to replace its purchases of shorter-term securities with longer-term bonds in a bid to lower interest rates at the far end of the yield-curve.
But the Fed gave a subdued economic outlook and failed to suggest more monetary easing was in the offing. FOMC decision
“The failure of the FOMC to announce another round of quantitative easing was a mild disappointment for the bullion markets,” said James Steel, analyst at HSBC Securities. “Following the announcement, the gold market may shift the focus back to the euro zone, we believe.”
The broad losses in the metals complex came after data released by HSBC showed Chinese manufacturing activity continued to weaken in June from levels seen in the previous month. HSBC’s China flash manufacturing data for June
Kate Gibson is a reporter for MarketWatch, based in New York.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
