Gold hits one month low

Date

9/12/2015 3:32:36 AM

(MENAFN- The Peninsula)

LONDON: Gold fell to a one-month low yesterday heading for a third successive weekly loss as uncertainty over the timing of the US Federal Reserve’s first interest rate increase in nearly a decade weighed on appetite for the metal.

Prices are down two percent this week and touched their weakest level since August 11 at $1099.05 an ounce on Wednesday.

Spot gold was down one percent at $1100.40 an ounce at 1344 GMT while US gold futures for December delivery were down $9.60 an ounce at $1099.70.

Traders are awaiting the Fed’s next policy statement on September 17 for clues on the timing of a US interest rate rise before taking any big positions in gold.

Gold has benefited in recent years from ultra-low rates which cut the opportunity cost of holding non-yielding bullion while weighing on the dollar in which it is priced.

Concerns over slowing economic growth in China mixed economic data and volatility in financial markets have increased uncertainty about the timing of any rate increase which had been expected as early as this month.

“Our house view is that they will wait until December” Commerzbank analyst Daniel Briesemann said. “I think that will lead to continued uncertainty in the gold market. The market would be in better shape if the Fed said clearly next week what it was going to do.”

The dollar edged up 0.1 percent against a basket of currencies yesterday. Global stocks slipped into the red but remained on track for their biggest weekly gain in eight as investors grappled with the possibility of US interest rates rising next week.

Physical gold demand among the major Asian consumers was relatively soft. Gold closed the week in a quiet fashion overnight in Asia MKS said in a note supported by modest Chinese demand but holding a tight range.

Two straight years of drought in India — for only the fourth time in over a century — have hit gold demand there and could cut imports by up to 10 percent in 2015 the head of a southern Indian regional gold federation said. “A drop below $1100 an ounce may elicit greater physical demand” HSBC said in a note.

Silver was down two percent at $14.37 an ounce while platinum was down 1.7 percent at $961.74 an ounce and palladium was down 1.4 percent at $579.47 an ounce. Palladium has been the best-performing precious metal this week rising 1.4 percent to snap three weeks of losses.

reuters

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.