Previous Story
Gold extends losses to near 5-1/2 year lows
Gold extended losses on Monday to reach near 5-1/2-year lows, as expectations for a rate hike in U.S. interest rates spurred selling even after bullion fell the most since 2013 in July.
Gold’s rout deepened last month as the U.S. dollar strengthened following upbeat U.S. economic data and comments by the Federal Reserve signaled the U.S. central bank is on course to raise interest rates for the first time in nine years.
There are expectations for that rate hike could come as early as September, presenting more downside risk for non-interest yielding gold. These expectations are strong enough to inject a bearish trend for gold.
Spot gold was down 0.1 percent at $1,093.90 an ounce by 0237 GMT. The yellow metal fell as low as $1,079.50 on Friday, near last month’s low of $1,077, its weakest since February 2010.
Gold lost almost 7 percent in July, its deepest monthly fall since June 2013. It fell for a sixth straight week last week, its longest retreat since 1999. U.S. gold for December delivery GCcv1 slipped 0.1 percent to $1,093.60 an ounce.
Investors are now focusing on the next monthly U.S. nonfarm payrolls report due on Friday, and a strong number could mean further weakness for gold. If there is more indication that the U.S. economy is improving very strongly, it could push gold prices below the $1,000 support level.
Hedge funds and money managers kept their first bearish stance in COMEX gold in at least a decade during the week ended July 28, suggesting the recent mass exodus from bullion was more than a knee-jerk reaction.
Amid waning interest in bullion, holdings in SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, dropped again, to 21.63 million ounces on Friday, the lowest since September 2008.
The post Gold extends losses to near 5-1/2 year lows appeared first on Forex Circles.
