Gold prices dropped to a 3-week low on Wednesday, as the dollar rose to over 1-year high, riding on upbeat U.S. consumer confidence data.
A rally in global stock markets too contributed to the yellow metal’s decline. U.S. stocks moved higher on strong private sector employment data and encouraging earnings reports from Facebook, General Motors and eBay.
The dollar index gained about 0.2% to 97.16, as traders continued to bet on U.S. economic growth and interest rate hikes this December and in the coming year.
Data released by the Conference Board on Tuesday showed U.S. consumer confidence to have increased in October, hitting its highest level since September 2000. The board’s consumer confidence index rose to 137.9 in the month, from a downwardly revised 135.3 in September.
Economists had expected the consumer confidence index to drop to 136.3 from the 138.4 originally reported for the previous month.
Gold futures for December ended down $10.30, or 0.8%, at $1,215.00 an ounce, the lowest settlement in three weeks. On Tuesday, gold futures closed down by $2.30, or 0.2%, at $1,225.30 an ounce. In October, gold futures gained over 2%.
Silver futures for December ended lower by $0.180, at $14.282 an ounce.
Copper futures for December settled at $2.6590 per pound, losing $0.0050 for the session.
According to a report released by Payroll processor ADP today, there was a significant increase in employment in the U.S. private sector in October. ADP said private employment jumped by 227,000 jobs in October after surging up by a downwardly revised 218,000 jobs in September.
Economists had expected an increase of about 189,000 jobs compared to the addition of 230,000 jobs originally reported for the previous month. The stronger than expected job growth in October reflected the biggest increase in private sector employment since a jump of 241,000 jobs in February.