4.6 C
New York
Wednesday, January 19, 2022

Gold flirts with three-month low, eyes on Fed meeting

Gold flirts with three-month low, eyes on Fed meetingNEW YORK/LONDON: Gold fell on Monday, trading just above its lowest level in more than three months, due to stronger European shares and expectations that this week’s Federal Reserve meeting could hint at the timing of any hike in US interest rates.

Spot gold was down 0.5 percent at $ 1,153.26 an ounce by 12:29 p.m. EDT (1629 GMT), just above last week’s three-month low at $ 1,147.10.

The metal had fallen for nine consecutive sessions up to Thursday, its longest losing streak since 1973.

US gold futures for April delivery settled up 80 cents at $ 1,153.20 an ounce.

Spot platinum continued its fall, reaching the lowest since July 2009 at $ 1,101 an ounce before paring losses to be down 0.5 percent $ 1,107.30. Gold shrugged off weakness in the dollar, which slid 0.8 percent against a basket of leading currencies.

The US currency, however, which has risen 10 percent so far this year, was still trading close to its highest since 2003.

“Speculative investors are quite clearly out of love with gold at the present time and as long as we have this meteoric rise in the US dollar going on, it’s difficult to see a change in gold’s fortunes,” bullion broker Sharps Pixley CEO Ross Norman said. Investors were looking at the Fed’s two-day policy meet that begins on Tuesday for clues on how soon it could raise interest rates.

Higher rates could dent demand for gold, which does not pay any interest.

“The only thing that could cause shorts to rethink their positions at the moment would be if the Fed didn’t raise rates in June,” Deutsche Boerse’s MNI senior analyst Tony Walters said. “But if the Fed removes ‘patient’ from its (statement) then I’d expect more selling.”

“Everything indicates that we’re headed toward a rate hike. This market is trying to discount anything that will come out on Wednesday,” said Eli Tesfaye, senior market strategist for RJO Futures in Chicago, referring to the day the Fed is expected to make a statement. Investor sentiment towards gold has been bearish. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.28 tonnes to 750.67 tonnes on Friday.

In the second-biggest consumer China, premiums on the Shanghai Gold Exchange increased slightly to $ 5-$ 6 an ounce above the global London benchmark.

Silver was down 0.3 percent at $ 15.58 an ounce, while palladium fell 1.2 percent to $ 780.25 an ounce.

Copyright Reuters, 2015

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles