Gold extended losses on Monday, dropping towards its lowest level in nearly six years, and was poised to record its steepest monthly slide in 2-1/2 years on prospects of a US interest rate hike this year. The precious metal has fallen out of favour as investors position themselves for the first US rate hike in nearly a decade. The Federal Reserve is expected to raise rates at its next policy meeting on December 15-16.
Investors believe gold, as a non-interest-paying asset, will take a hit to demand from higher rates as the dollar gains. Spot gold slipped 0.2 percent to $1,055.60 an ounce by 0656 GMT. It had dropped to $1,052.70 earlier in the session, within striking distance of $1,052.46, the lowest since February 2010, reached on Friday.
"With the charts looking increasingly dicey as we head into the Fed policy meeting, just as investment money continues to flee the complex, the odds are good that the $1,000 level is the next stop for (gold) prices," said INTL FCStone analyst Edward Meir. Bullion has lost about 7.5 percent of its value in November, its biggest monthly dip since June 2013. Investors are pulling money out of bullion funds, exacerbating the sell-off in gold. Assets in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, fell to their lowest since September 2008 on Friday.
Comments
Comments are closed.