Physical demand outside of Asia also remained soft. Spot gold had ticked up 0.5 percent to $1,109.10 an ounce by 0647 GMT, not far from $1,102.35 hit in the previous session, the lowest since September 11. “Near-term Fed rate hike in December is an overhang on gold prices”.
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Weakness since the Fed’s hawkish tone of last week can be ascribed to hedge funds reducing these positions.
Technical selling was sending prices lower, analysts said.
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On Monday, gold once again slipped to touch its lowest in the last four weeks. “Until ETFs show signs of stabilisation, PGMs may remain under pressure near term”, it said. US Mint American Eagle gold coin sales slumped 73 percent in October.
But even poor figures on Friday may not be enough to reassure gold investors.
Speculators trimmed a bullish bet in gold from an 8-1/2-month high in the week ended October 27, while they boosted a net long stance in silver to the highest level on record. In other precious metals, palladium took the biggest hit and dropped 4.5 per cent to a five-week low of $US642.97 an ounce.
New York Fed President William Dudley later told reporters that the December meeting is a “live possibility” for raising USA interest rates for the first time in a decade. Holdings in the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, fell to a three-week low by almost three tonnes to 689.28 tonnes on Monday.
“We always said that before the first rate hike, there would be pressure on gold, and this seems to be materialising at the moment”.
Any economic USA data could be interpreted in various ways, so investors are unlikely to see clear-cut signals on near-term rate decisions, Turner said.
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Turning to wider markets, Germany’s DAX was last up 0.7 percent, while France’s CAC-40 fell 0.2 percent. “With yields being universally low, investors are continuing to find better value in stocks rather than gold or silver, which pay no interest or dividends and cost money to store”, said Fawad Razaqzada, technical analyst for Forex.com.
