COMEX gold trades weaker near $1310/oz Thursday after testing 3 1/2 month high yesterday. Gold trades lower today after ending higher for previous nine trading sessions.
Gold weakened today as recent rally showed signs of exhaustion. Gold has gained nearly 7% from the lows set in early December.
The correction was triggered by gains in US dollar. The US dollar index trades near 92.2 levels after a 0.3% gain yesterday. The US dollar index slumped to 3 ½ month low earlier this week but has recovered on upbeat economic data.
ISM manufacturing index for December stood at 59.7 as against forecast of 58. Construction spending rose 0.8% in November as against forecast of 0.7% growth.
FOMC minutes showed that Fed officials support gradual rate hikes amid strong growth and despite weaker inflation. This also lent support to US dollar.
Also weighing on gold is sharp gains in equity market. US equity market hit fresh record high levels yesterday. Asian equity markets are trading higher today. Optimism about US and Chinese economy has boosted risk sentiment