Gold slides toward $1,200 as U.S. rate hike looks imminent 

gold

Gold prices came under renewed pressure on Friday, a day after Federal Reserve Chairwoman Janet Yellen said a U.S. interest-rate hike could come “relatively soon.”

Yellen’s prepared comments to lawmakers on Thursday, which came on the heels of strong economic data, sent gold to its lowest finish since June 2, at $1,216.90 an ounce.

Sellers stepped in again on Friday, pushing gold futures for December deliveryGCZ6, -0.75%  down $9.70, or 0.8%, to $1,207.10 an ounce.

The central bank chief did little to dispel expectations of an interest-rate hike as early as December. The prospect of higher interest rates has largely been negative for gold, although rate-hike expectations, for the most part, are already reflected in the market.

“With the renewed dollar strength induced by Janet Yellen’s testimony, gold has ended its period of consolidation with another break to the downside. There is now very serious pressure on the key support around $1,200, which was posted during Q1 and Q2 this year,” said Richard Perry, market analyst at Hantec Markets, in a note.

Expectations of higher U.S. interest rates have helped drive gains for the dollar, which tends to move inversely to gold. On Friday, the ICE Dollar index DXY, +0.05%  , which measures the currency against a basket of six rivals, marked a fresh 13-year high.

Friday would mark the third-straight loss for gold, which has fallen in eight of the last nine trading sessions. For the month, gold is down 5.4%, and it is facing a 1.6% drop for the week with one trading session to go.

Among other metals contracts, December copper HGZ6, -0.72%   fell 2 cents, or 1%, to $2.466 a pound. But December silver SIZ6, -1.80%  tracked gold losses, down 20 cents, or 1.1%, to $16.575 an ounce.

January platinum PLF7, -1.95%  shed $14.70, or 1.6%, to $930.40 an ounce, while December palladium PAZ6, -3.23%   slid $12.15, or 1.7%, to $717.50 an ounce.

Source: MarketWatch

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