NEW YORK, Nov 12 — Gold traded below the highest level in a week amid expectations that US interest rates will rise, with assets in the largest exchange-traded product backed by the metal posting the longest slump in a year.
Gold for immediate delivery was at US$1,162.05 (RM3,884) an ounce at 9.05am in Singapore from US$1,164.33 yesterday, when prices rose 1.1 per cent, Bloomberg generic pricing showed. On Nov. 7, the metal fell to a four-year low before rallying to US$1,178.82 as US jobs data that trailed forecasts hurt the dollar.
Gold is heading for the first back-to-back annual retreat since 2000 as the end of the Federal Reserve’s asset-purchase program and falling oil prices diminished demand for the metal as an inflation hedge. Holdings in the SPDR Gold Trust shrank for a sixth day to a six-year low yesterday in the longest slump since November 2013. Bullion may drop to US$1,120 by year-end on the dollar’s strength, according to Philip Klapwijk, managing director at Precious Metals Insights.
“As economic fundamentals diverge, so will monetary policies, which is the backdrop for continued strength in the dollar,” Yang Xi, a Hangzhou, China-based analyst at Yongan Futures Co., wrote in a note today. “As oil prices extend declines and global inflation remains low, all these combine to provide bearish forces for precious metals.”
Brent crude retreated to a four-year low in London yesterday amid a global supply glut. The Bloomberg Dollar Index, a gauge of the currency against 10 counterparts, was 0.2 per cent higher at 1,094.07, near a five-year high reached last week.
Gold for December delivery fell 0.2 per cent to US$1,161.10 an ounce on the Comex in New York after most-active prices climbed on November 7 to US$1,179, the highest level since Oct. 31.
Silver for immediate delivery traded at US$15.72 an ounce from US$15.7244 yesterday, when prices rose 0.7 per cent. Spot platinum was at US$1,201.88 an ounce from US$1,202.63. Palladium lost 0.2 per cent to US$771.03 an ounce. — Bloomberg
