Gold Prices Drops 9-1/2 Month Lows as Dollar Rises in Expectation of US Rate Hike

Gold Prices Drops 9-1/2 Month Lows as Dollar Rises in Expectation of US Rate Hike

Gold futures prices declined on Thursday after falling to its lowest level since February, with the stronger dollar amid growing expectations on the presence of high rate of the Federal Reserve in December after positive US economic data.

Gold for December delivery was trading at $1,187.55 a troy ounce, after earlier falling as low as $1,179.75, a level not seen since February 8.

Spot gold was down 0.2 per cent at $1,185.55 an ounce. It dropped 2 per cent in the previous session to touch its lowest in 9-1/2 months at $1,181.45.

The minutes of the Fed meeting November 1 to 2 showed policymakers Fed seemed confident on the eve of the US presidential election, the economy to strengthen enough to justify the increases in interest rates any time soon.

Investors are now estimated at nearly 100 percent prospect of an increase in December the rate the Fed, according to the Chicago Commodities Exchange FedWatch, and some investors expect a further rise in 2017 if he continued economic momentum.

Increased US dollar index, which tracks the dollar’s strength against a trade-weighted basket of six major currencies last at 101.67, not far from its highest level of 102.11, the strongest level since early April 2003.

Dollar gained after the data boosted US optimistic and precise Federal Reserve on Wednesday forecast to raise interest rates next month.

Holdings of SPDR Gold Trust, dropped 1.47 per cent to 891.57 tonnes on Wednesday from Tuesday.

Gold prices were trading lower 0.22 per cent down at Rs 28,766 per 10 gm on the Multi Commodity Exchange (MCX) in early trade on Thursday.

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