Gold futures were fell to their lowest level since early January (8-month low), and silver to a four-year low on Monday owing to the speculation the Federal Reserve will begin its cycle of rate torque ahead of expected fueled selling of precious metals.
This quarter, gold has fallen 7.9 percent, while the US dollar gained 5.4 percent. Losses were limited since the dollar a break after hitting highs of four years versus a basket of currencies on Friday was taken, and European shares fell. However, a biggest weakness is on the cards such as gold tap toward its June 2013 low at $ 1.180, traders said.
U.S. Gold futures for December delivery were down $1.20 an ounce at $1,215.40. Spot gold was down 0.1 per cent at $1,214.84 an ounce, having earlier touched a low of $1,208.36.
Silver futures for delivery in December declined 0.6 percent to $ 17.735 an ounce on the Comex. The price touched $ 17.325, the lowest since July 28, 2010 In the spot market, an ounce of purchased gold as many 69.67 ounces of silver, the most since June 2010.
“People want dollar rather gold, and gold will continue to in disgrace as people expect Fed rates increasing.” market player said.
“US gold futures traded with little change after dropping to the lowest level in eight months and silver spread drop the cheapest four years as a recovery of the dollar absorbs demand for precious metals such as alternative investments. Also on the domestic market Gold slipped nearly 0.5 per cent is trading below Rs 26,400, and 1 per cent decline in silver is trading at Rs 39,208.” said 100 Mcx Tips.
The hedge funds reduced bullish gold holdings for the fifth consecutive week, the longest run this year, as the stock rose and inflation kept quiet. Holdings in exchange-traded funds backed by the metal fell to a five-year, while the open futures and options interest approached the lowest rate since 2009.
The group of precious metals has seen sharp losses the last few days and US stocks rose historic highs and the dollar index hit a 4-year expectations the world‘s largest economy will start squeeze rates sooner than expected.
Highest interest rates increase the opportunity cost of keeping the gold pays do not. A drop in rates at record levels during the financial crisis was a key factor for sending gold prices to a record $ 1,920.30 an ounce in September 2011.
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