Investing.com - Gold prices fell to an eight-month low on Thursday, after the number of people who filed for unemployment assistance in the U.S. last week fell more than expected, boosting optimism over the health of the economy and supporting the case for a U.S. interest rate hike this year.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $1,140.60 a troy ounce, a level not seen since November 7, before trading at $1,143.40 during U.S. morning hours, down $4.00, or 0.35%.
A day earlier, gold lost $6.10, or 0.53%, to end at $1,147.40. Futures were likely to find support at $1,130.40, the low from November 7, and resistance at $1,155.80, the high from July 15.
Also on the Comex, silver futures for September delivery slumped 12.6 cents, or 0.84%, to trade at $14.92 a troy ounce. On Wednesday, silver dropped 26.7 cents, or 1.74%, to end at $15.04.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 15,000 last week to 281,000 from the previous week’s total of 296,000. Analysts had expected initial jobless claims to fall by 10,000 to 285,000 last week.
First-time jobless claims have held below the 300,000-level for 19 consecutive weeks, which is usually associated with a firming labor market.
Federal Reserve Chair Janet Yellen reiterated Wednesday that the central bank was on track to raise interest rates by the end of the year if the economy continues to evolve as expected.
Her comments came in a testimony to the House Financial Services Committee. Yellen is scheduled to address the Senate Banking Committee on Thursday.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.45% to hit 97.71, the most since June 2.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere in metals trading, copper for September delivery dipped 0.2 cents, or 0.07%, to trade at $2.520 a pound during morning hours in New York.
Greece's parliament approved harsh austerity measures demanded by the country’s creditors two hours after the imposed deadline early Thursday morning local time, clearing the way for negotiations on a third bailout package to begin.
The reform plan was approved with 229 votes in the 300-seat chamber, despite dozens of hardliners in the ruling Syriza party opposing the package, raising doubts over the future of Prime Minister Alexis Tsipras' government.
The eurogroup of euro zone finance ministers were to hold talks on the latest developments in Greece later Thursday.
Meanwhile, officials in Brussels agreed in principle to provide a €7 billion bridge loan to keep Greece afloat until the new bailout can be finalized.