Gold dropped for a third day as the dollar stabilized after a slump sparked by the Federal Reserve paring its interest-rate outlook for 2016.
Bullion for immediate delivery declined as much as 0.4 percent to $1,250.99 an ounce and was at $1,252.52 at 11:55 a.m. in Singapore, according to Bloomberg generic pricing. The yellow metal fell a combined 0.6 percent on Thursday and Friday.
Gold has risen 18 percent this year, buoyed by speculation that the Fed wouldn’t actually boost rates by the four times that policy makers signaled at the end of 2015. Last week, projections from the central bank implied just two quarter-point increases this year, sparking a sell-off in the U.S. currency. Gold was trading lower on Monday following a recovery in the dollar, according to David Lennox, an analyst at Fat Prophets in Sydney.
“It’s probably just the currency movements that are holding the price around where it is,” Lennox said by phone. “We’ve seen the results of the Federal Open Market Committee meeting, we know they’re not going to raise rates too soon, so the dollar’s probably stabilized at the level where it is. We’re just seeing the gold price hovering.”
Q8 Trade Gains Recognition for ‘Most Trusted Trading Platform in MENA’Go to article >>
- Investors aren’t deterred by the slide in prices. Holdings in exchange-traded funds backed by gold rose 21.4 metric tons to 1,763.1 tons on Friday, the highest level since March 2014, according to data compiled by Bloomberg. That’s the biggest increase in almost a month.
- Spot silver rose 0.2 percent, palladium slipped 0.1 percent and platinum lost 0.4 percent.
To contact the reporter on this story: Ranjeetha Pakiam in Singapore at email@example.com. To contact the editors responsible for this story: Jason Rogers at firstname.lastname@example.org, Keith Gosman, Andrew Hobbs
©2016 Bloomberg News