Gold eyes fourth weekly loss

A salesman counts money at a jewelry shop at the gold market in Riyadh.

A salesman counts money at a jewelry shop at the gold market in Riyadh.

Gold fell back toward near six-year lows on Friday, staying on track for a fourth straight weekly loss, on expectations the Federal Reserve is set to raise US interest rates next month for the first time in nearly a decade.

A raft of Fed officials lined up behind a December rate rise on Thursday, with one central banker saying the risk of waiting too long was now roughly in balance with the risk of moving too soon to normalize rates after seven years near zero.

Spot gold was at $1,082.50 an ounce at 1500 GMT, down 0.2 percent, having touched its lowest since February 2010 on Thursday at $1,074.26. US gold futures for December delivery were down 10 cents an ounce at $1,080.90.

Rising rates tend to weigh on gold, as they lift the opportunity cost of holding non-yielding assets, while boosting the dollar. Gold has fallen more than 5 percent since the start of November, when a stronger than expected US payrolls report fueled expectations for a near-term rate hike.

“Quite clearly, with the growing sense that there will be a December rate hike after the strong US data last week, investors have been bailing out of gold,” Citi analyst David Wilson said.

“I suspect that is likely to continue.”

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares GLD, fell by another 1.5 tons on Thursday. The fund has seen outflows of more than 30 tons so far in November, the first monthly decline in its holdings since July.

The platinum group metals also came under pressure from fund selling. Holdings of platinum ETFs are at a two-year low, while assets of palladium funds are at their lowest since April 2014.

“This additional near-term supply from ETFs and other liquidation took platinum to seven-year lows and undermined palladium also,” HSBC said in a note.

“While we find physical demand for the PGMs from industrial sources to be broadly steady, investors are retreating and we see no early signs of further production restraint.”

Platinum was at $862 an ounce, down 1.4 percent, having earlier slid to its lowest since December 2008 at $859.

Palladium was down 3.4 percent at $539.72 an ounce after touching a 2-1/2 month low of $530.75. Prices of the autocatalyst metal are down more than 12 percent this week, its biggest weekly decline since late 2011.

Silver was down 0.6 percent at $14.18 an ounce, off an earlier 2-1/2 month low at $14.15.


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