London — Gold prices tumbled to
nine-and-a-half-month lows on Friday, heading for a for a third
consecutive weekly decline as investors sold on factors including the
expectation of a US interest rate rise.
Spot gold was up 0.5% at $1,188.96/oz by 10.57am GMT as funds took profits on short positions, from an earlier $1,171.21, its lowest since February 8. The precious metal has fallen about 7% so far in November, leaving it on track for its largest monthly fall since June 2013.
US gold futures fell about 1% to $1,177.9/oz, after dipping to their lowest since February 5 at $1,170.30.
"Investors are still retreating from gold, although prices falling below $1,200 has promoted some profit-taking," said Commerzbank analyst Eugen Weinberg.
"Gold is being driven by many factors, including equity markets, currency markets and expectations of higher US interest rates, which are going to be a huge burden."
Equity markets have rallied since Donald Trump won the US presidential election. The US Federal Reserve is expected to raise rates at its December meeting. That would further boost the dollar, making commodities more expensive for holders of other currencies.
Markets are now pricing in a nearly 100% probability of a December Fed rate increase, according to CME FedWatch.
The dollar has gained more than 6% against other major currencies since the start of October. Overall holdings of physical gold in exchange traded funds have fallen more than 5% to 54.135-million ounces since November 9, the day after the election.
"A further test of the downside cannot be ruled out just yet, especially as ETF liquidations persist," UBS analysts said in a note. "Further pressure heading into the December [Federal open market committee’ meeting is possible."
Traders say the US monthly jobs report due on December 2 will be key to market sentiment, but that it probably won’t deter the US central bank. "Technically, it doesn’t look good," a trader said, adding that gold’s foray below $1,171.68, a 61.8% Fibonacci retracement level, could mean further falls. "But we may see some consolidation first."
Elsewhere, silver gained 1.3% to $16.45/oz and palladium slipped 0.1% to $728.30.
Platinum ceded 0.5% to $909.25 after having earlier hit its lowest since February 8 at $901.00.
Reuters
Spot gold was up 0.5% at $1,188.96/oz by 10.57am GMT as funds took profits on short positions, from an earlier $1,171.21, its lowest since February 8. The precious metal has fallen about 7% so far in November, leaving it on track for its largest monthly fall since June 2013.
US gold futures fell about 1% to $1,177.9/oz, after dipping to their lowest since February 5 at $1,170.30.
"Investors are still retreating from gold, although prices falling below $1,200 has promoted some profit-taking," said Commerzbank analyst Eugen Weinberg.
"Gold is being driven by many factors, including equity markets, currency markets and expectations of higher US interest rates, which are going to be a huge burden."
Equity markets have rallied since Donald Trump won the US presidential election. The US Federal Reserve is expected to raise rates at its December meeting. That would further boost the dollar, making commodities more expensive for holders of other currencies.
Markets are now pricing in a nearly 100% probability of a December Fed rate increase, according to CME FedWatch.
The dollar has gained more than 6% against other major currencies since the start of October. Overall holdings of physical gold in exchange traded funds have fallen more than 5% to 54.135-million ounces since November 9, the day after the election.
"A further test of the downside cannot be ruled out just yet, especially as ETF liquidations persist," UBS analysts said in a note. "Further pressure heading into the December [Federal open market committee’ meeting is possible."
Traders say the US monthly jobs report due on December 2 will be key to market sentiment, but that it probably won’t deter the US central bank. "Technically, it doesn’t look good," a trader said, adding that gold’s foray below $1,171.68, a 61.8% Fibonacci retracement level, could mean further falls. "But we may see some consolidation first."
Elsewhere, silver gained 1.3% to $16.45/oz and palladium slipped 0.1% to $728.30.
Platinum ceded 0.5% to $909.25 after having earlier hit its lowest since February 8 at $901.00.
Reuters
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