AGL 38.16 Decreased By ▼ -0.06 (-0.16%)
AIRLINK 134.19 Increased By ▲ 5.22 (4.05%)
BOP 8.85 Increased By ▲ 1.00 (12.74%)
CNERGY 4.69 Increased By ▲ 0.03 (0.64%)
DCL 8.67 Increased By ▲ 0.35 (4.21%)
DFML 39.78 Increased By ▲ 0.84 (2.16%)
DGKC 85.15 Increased By ▲ 3.21 (3.92%)
FCCL 34.90 Increased By ▲ 1.48 (4.43%)
FFBL 75.60 Decreased By ▼ -0.11 (-0.15%)
FFL 12.74 Decreased By ▼ -0.08 (-0.62%)
HUBC 109.45 Decreased By ▼ -0.91 (-0.82%)
HUMNL 14.10 Increased By ▲ 0.09 (0.64%)
KEL 5.40 Increased By ▲ 0.25 (4.85%)
KOSM 7.75 Increased By ▲ 0.08 (1.04%)
MLCF 41.37 Increased By ▲ 1.57 (3.94%)
NBP 69.70 Decreased By ▼ -2.62 (-3.62%)
OGDC 193.62 Increased By ▲ 5.33 (2.83%)
PAEL 26.21 Increased By ▲ 0.58 (2.26%)
PIBTL 7.42 Increased By ▲ 0.05 (0.68%)
PPL 163.85 Increased By ▲ 11.18 (7.32%)
PRL 26.36 Increased By ▲ 0.97 (3.82%)
PTC 19.47 Increased By ▲ 1.77 (10%)
SEARL 84.40 Increased By ▲ 1.98 (2.4%)
TELE 7.99 Increased By ▲ 0.40 (5.27%)
TOMCL 34.05 Increased By ▲ 1.48 (4.54%)
TPLP 8.72 Increased By ▲ 0.30 (3.56%)
TREET 17.18 Increased By ▲ 0.40 (2.38%)
TRG 61.00 Increased By ▲ 4.96 (8.85%)
UNITY 28.96 Increased By ▲ 0.18 (0.63%)
WTL 1.37 Increased By ▲ 0.02 (1.48%)
BR100 10,786 Increased By 127.6 (1.2%)
BR30 32,266 Increased By 934.6 (2.98%)
KSE100 100,083 Increased By 813.5 (0.82%)
KSE30 31,193 Increased By 160.9 (0.52%)

Gold fell more than 1 percent to a 10-1/2-month low on Thursday after the Federal Reserve sounded an unexpectedly hawkish note on US interest rates, sparking a surge in Treasury yields and sending the dollar to a 14-year high. Lifting the federal funds rate to a 0.50-0.75 percent range on Wednesday, the US central bank flagged a faster pace of hikes next year as it geared up for the incoming Trump administration's pledges to cut taxes and boost spending.
That sparked a rally in the dollar, pressuring assets priced in the currency, while US Treasury yields soared, lifting the opportunity cost of holding non-yielding gold. "The Fed was more hawkish than expected, which re-started this dollar rally," ABN Amro analyst Georgette Boele said. "With yields rising in the United States and the dollar massively up, that's the worst possible combination for gold."
Spot gold hit a 10-1/2-month low of $1,122.35 an ounce, and was down 1.2 percent at $1,130.72 by 3:03 p.m. EST (2003 GMT). US gold futures for February delivery settled down 2.9 percent at $1,129.80, showing a stronger decline as it had settled positive on Wednesday prior to the Fed statement. "The latest move in short-term US Treasury yields suggests that the price of gold has further to fall," said Caroline Bain, chief commodities economist for Capital Economics, cautioning that "higher nominal yields need not necessarily be negative for gold if they reflect rising inflation expectations."
Bullion had already fallen sharply in the run-up to the Fed meeting after Republican candidate Donald Trump's election to the US presidency sparked a rally in the dollar and a rise in assets seen as higher risk, like stocks, at gold's expense. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, are down about 10 percent from mid-November.
Meanwhile, silver was down 5.2 percent at $15.95 an ounce, after falling to hit its lowest since June 1 at $15.82. Platinum was 2.8 percent lower at $897.60, after falling to $885, the lowest since early February. Palladium was down 2.3 percent at $703, after sinking to a one-month low at $693.90.

Copyright Reuters, 2016

Comments

Comments are closed.