* Dollar gains as Fed points the way to trimming bond
* Report of Trump probe spurs some safe haven buying
* Silver hits weakest in nearly four weeks, platinum at
By Eric Onstad
LONDON, June 15 Gold fell to a three-week low on
Thursday, weighed down by a stronger dollar as investors began
to assess the potential for another U.S. rate hike later in the
year, supported by data showing a strong U.S. jobs market.
The losses in gold were limited, however, with bullion
underpinned by a myriad of global uncertainties, including a
report that U.S. President Donald Trump was under investigation.
"Just like in previous rate hikes, the next day the market
starts looking at the probability of the next hike because
everything was factored in beforehand," Natixis metals analyst
Bernard Dahdah said.
The U.S. Federal Reserve raised interest rates by a notch as
expected on Wednesday and indicated further tightening before
the end of the year.
U.S. data on Thursday bolstered the case for higher rates,
as the number of Americans filing for unemployment benefits fell
more than expected last week, pointing to shrinking labour
"If you just look at economics, there's a chance of more
downside. The Fed was talking about another potential rate hike
later this year, which is negative for gold. But there's still
enough for people to worry about in geopolitics at different
levels," Dahdah said.
Higher interest rates are negative for gold because they
increase the opportunity cost of holding non-yielding gold by
foregoing the chance of earning interest on cash holdings.
Spot gold fell 0.6 percent to $1,253.09 per ounce by
1242 GMT after touching $1,251.18, the weakest since May 24.
U.S. gold futures for August delivery fell 1.6
percent to $1,256 an ounce.
The dollar index was up 0.5 percent after the jobs
data and following Wednesday's Fed meeting which lifted rates
and also pointed the way to a trimming of the huge emergency
funds pumped into the economy since 2009.
Gold got some support from safe haven buying after the
Washington Post reported that Trump was being investigated by
special counsel Robert Mueller for possible obstruction of
As long as uneasiness around the Trump government among
speculators and investors exists, gold will hold up pretty well,
said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
"Spot gold was also supported by short-term interest in
physical gold in Asia, especially from Shanghai this morning,"
Jeffrey Halley, senior market analyst at OANDA, said.
Among other precious metals, silver shed 1 percent to
$16.71 per ounce after slipping to $16.64, the lowest since May
Platinum dropped 1.9 percent to $918, having hit the
lowest in over a month at $913.50, while palladium shed
0.5 percent to $858.70 per ounce after rallying by 25 percent so
far this year.
"We're bullish on palladium compared to last year, but we
think it has overshot," Dahdah said.
(Additional reporting by Nithin Thomas Prasad and Vijaykumar
Vedala in Bengaluru; Editing by Susan Fenton and Edmund Blair)