Gold futures settled modestly lower on Thursday snapping two consecutive gains, as the firmer than expected US job data and strength in dollar value compared to its peers saddled yellow metal’s investment appeal. Moreover, caution ahead to the release of inflation data which could be one of the major factor in US Federal Reserve’s decision on interest rate hike, also pressured yellow metal buying. Friday’s US Consumer Price Index (CPI) report will be followed by the Fed’s policy meeting on December 14-15. Even though, gold is considered as inflation hedge, higher interest rates would increase the opportunity cost of holding non-yielding bullion.
Gold futures for February declined by 1.2% or $8.80 to settle at $1,776.70 an ounce on the Comex division of the New York Mercantile. While, spot gold was dipped by 0.3% at $1,776.56 per ounce.