Gold down a third day as ISM feeds dollar lift

CHICAGO (Aug 1)  Gold futures settled lower on Thursday to mark their third straight loss, pressured as the U.S. dollar strengthened further after a gauge of U.S. manufacturing activity jumped to its highest level in two years.

The precious metal, however, continued to find some support after the Federal Reserve on Wednesday slightly downgraded its view of the U.S. economic recovery and offered no hints as to when it may begin tapering asset purchases.

Gold for December delivery   fell $1.80, or 0.1%, to settle at $1,311.20 an ounce on the Comex division of the New York Mercantile Exchange. The contract has now tallied a three-session loss of around 1.4%.

“Investors are showing no love for the shiny metals ... following the release of strong U.S. economic data, which boosted the dollar’s appeal,” said Fawad Razaqzada, technical analyst at GFT Markets.

“Stocks also rallied and so there was even less reason for investors to buy gold or silver,” he said in an afternoon note. “Both metals remain in a prolong downtrend, although the pace of the selling has certainly eased in recent weeks, along with the speed of [exchange-traded fund] outflows.”

Gold prices were up on the day, trading around $1,322 before the Institute for Supply Management said its July manufacturing index rose to a reading of 55.4% from 50.9% in June. Economists polled by MarketWatch expected a reading of 52.0%.