Investing.com – Gold slumped on Thursday, as a rise in the U.S. dollar caused a sell-off of the risk adverse precious metal.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, surged 0.37% to 89.55 as of 10:53 AM ET (14:53 GMT).
The dollar rose after the latest meeting minutes from the Federal Reserve showed the central bankers felt confident about the strength of the U.S. economy and inflation rising to its 2% target rate.
Gold is denominated in the U.S. currency and becomes more expensive for holders of other currencies when the dollar rises.
Comex gold futures for June delivery were down 1.35% to $1,341.70 a troy ounce.
Meanwhile tensions in the Middle East eased but still remained in the back of investors minds.
After a Russian diplomat said his country’s forces would shoot down U.S. missiles launched at Syria, U.S. President Donald Trump warned Russia to “get ready” for imminent military action in response to an alleged chemical attack over the weekend.
Trump tweeted early Thursday morning that he had not yet decided on an attack on Syria.
Investors seek out gold as a store of value during times of geopolitical uncertainty or market turmoil, while a weaker dollar makes the dollar-denominated metal cheaper for holders of other currencies.
Elsewhere on the Comex, silver futures were down 1.60% to $16.500 a troy ounce. Among other precious metals, Platinum Futures inched down 0.02% to $934.10, while Palladium Futures decreased 1.61% to $945.45 an ounce. Copper futures fell 1.76% to $3.062 a pound.
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