Gold futures marked a fourth straight session decline on Monday as traders looked to comments from Federal Reserve officials for further clues on the timing of a US interest-rate increase. However, in Europe, the gold futures were last seen up 0.07% after earlier hitting a session high of $1,325.55 in early. It touched a low of $1,315.27 on Tuesday, the lowest in more than one week. Spot silver fell 0.3 percent to $18.88 an ounce.
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Precious-metals traders have been in thrall to contrasting comments from Fed officials before the Fed’s policy meeting next week. That was the lowest settlement for the contract since September 1, according to FactSet data. Markets are pricing in just a 15% chance that United States interest rates will be hiked this month, according to CME FedWatch. But it said the chances of the next rate hike occurring at the Federal Open Market Committee’s (FOMC) December meeting have risen to 40 percent from 30 percent. Many now expect a rise in December after the United States presidential election.
“We believe any decision to raise rates in 2016 will ultimately be viewed as a misstep that increases financial and economic risks, and this will be to gold’s benefit”, said Joe Foster, portfolio manager and strategist of VanEck International Investors Gold Fund in NY. Crude oil prices fell 3% yesterday and were down another 1% this morning.
Expectations that the US Federal Reserve will raise rates next week have receded, putting pressure on the dollar, which when it falls makes gold cheaper for holders of other currencies.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.47 percent to 935.49 tonnes on Tuesday.
Spot silver was up 0.9 per cent at $US19.02 an ounce. Earlier in the trading session, the pound was up against the greenback, but has since corrected back to about .32.
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The Wall Street Journal Dollar Index, which measures the USA currency against a list of 16 others, was recently down 0.2% at 86.67. The news that South African mine production figures for July released on Tuesday showed PGM output fell by 10.8% compared to June and 8.2% year on year as miners close down unprofitable mines and safety stoppages halt operations, has also helped underpin platinum prices.
