Gold Prices Slide to 1-Month Low As US Rate Hike View Weighs

Gold Prices Slide to 1-Month Low As US Rate Hike View Weighs

Prices of gold futures were on track to post their 4th straight losing session on Tuesday as investors dumped the precious metal on expectations the US Federal Reserve rate hike this year.

Gold for December delivery on the Comex tumbled $11.30, or 0.99%, to trade at $1,124.60 a troy ounce.

Spot gold ticked up 0.3 per cent to $1,137.05 an ounce at 12:17 PM, but not too far from a four-week low of $1,132.35 reached in the previous session.

Gold had risen in October as concerns about the global downward outlook led by China and its impact on growth prospects in the United States had encouraged market participants to drive back the expectations of a rate increase in March 2016.

But the hardline statement last week the Fed forced market players to readjust expectations of higher interest rates as early as December, prompting a sell-off in the bullion market.

As an asset without interest paid, the demand for gold could take a hit of the highest rates, while a stronger dollar makes dollar-denominated gold more expensive for holders of other currencies.

US economic data Monday supported a rate hike this year. Factory activity in October hit a 2-1 / 2 years, but an increase in new orders offered hope US could have seen its worst.

Other data showed that overall construction spending rose in September to the highest in 7-1 / 2 years, indicating that the economy was on firmer ground despite signs of cooling consumer spending.

Investor outputs traded funds have increased.

Holdings in SPDR Gold Trust, the exchange-traded fund backed by gold higher, fell 0.43 percent to 689.28 tonnes on Monday, the lowest in three weeks. The fund has not seen any input from 19 October.

Market participants are looking ahead to a non-farm payrolls on Friday for clarity on the likelihood of an interest rate hike in the short term.

Gold prices move in range of 26300-26600 at Multi Commodity Exchange.

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