Gold down a third session as some upbeat U.S. economic data dull haven demand for the metal

Gold futures finished lower Thursday, suffering a third straight session decline, with strength in the U.S. dollar and some upbeat economic data helping to dull haven demand for the precious metal.

Investors also reacted to minutes from the Federal Open Market Committee on Wednesday that showed that monetary policymakers were on track to begin unwinding parts of their easy-money programs later this year.

Minutes from the Fed’s July 27-28 meeting, underscored recent reports that point to a growing desire to roll back monthly buying of $120 billion in Treasurys and mortgage-backed securities, which may be viewed as a negative for bullion, but that was also weighing on bullish sentiment in equities, contributing to losses in the U.S. stock market, and providing some support for gold.

The minutes showed “most members favoring early tapering, but officials are still somewhat divided on the subject,” wrote Jim Steel, chief precious metals analyst at HSBC in a recent note. But the earlier move up in gold was “not dramatic and gold halted” before reaching the key $1,800 mark, he said.

On Thursday, December gold GCZ21, -0.21% GC00, -0.21% fell $1.30, or nearly 0.1%, to settle at $1,783.10 an ounce, after ending 0.2% lower on Wednesday, ahead of the release of the Fed minutes. September silver SIU21, -1.23% lost 21.7 cents, or 0.9%, to nearly $23.21 an ounce. Gold and silver both marked a third session loss in a row.

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The moves for precious metals came as U.S. benchmark stock indexes saw mixed trading, with the Dow Jones Industrial Average DJIA, -0.67% lower, but the S&P 500 Index SPX, -0.37% trading slightly higher.

Gold prices initially moved up, then headed lower, after weekly U.S. jobless claims data showed a drop of 29,000 to 348,000 in the week ended Aug. 14, a 17-month low, but Philadelphia’s Federal Reserve reported that its business activity index fell to 19.4 in August from 21.9 in July. Losses deepened after a reading on the leading economic index revealed a 0.9% jump in July.

Meanwhile, concerns about the spread of the highly transmissible delta variant of COVID-19 was also putting some pressure on the U.S. stock market as a study from the University of Oxford based on real-world data, showed diminished effectiveness from coronavirus vaccines to the delta variant.

Gold also declined on the back of strength in the U.S. dollar, up 0.4%, as measured by the ICE U.S. Dollar Index DXY, 0.46%. A stronger dollar can weigh on appetite for assets priced in the currency like gold.

“Gold was caught between two major forces, with the impact of stronger dollar being offset by haven demand,” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a research note.

Meanwhile, the 10-year Treasury note yield TMUBMUSD10Y, 1.242% was at 1.243%, down 3.2 basis points, highlighting a rush to assets perceived as safe and helping to buoy gold prices because lower yields can help bolster demand for nonyielding metals.

Carlo Alberto De Casa, market analyst at Kinesis, said “$1,790 remains a key resistance zone” for gold.

“A clear surpass of this mark will put gold back in the former trading range of $1,790—1,820, which contained prices for weeks earlier in July,” the analyst wrote.

Among other metals, September copper HGU21, -1.92% fell 1.9% to $4.04 a pound. October platinum PLV21, -3.13% shed 2.5% to $971.20 an ounce and September palladium PAU21, -4.72% settled at $2,297.90 an ounce, down 5.2%.

“Palladium seems to have fallen out of favor with investors, but the market is still laboring under a wide production/consumption deficit, according to our supply/demand model,” HBSC’s Steel said. “This should support the market.”