Gold heading for worst weekly run of the year
Bullion is floundering near its weakest level in two months
Gold has taken a relentless battering.
Prices are poised to drop for a fourth week, the worst streak of losses this year, on prospects for higher U.S. interest rates, a rising dollar, a strong American economy and record equity markets. Fears over a potential nuclear conflict with North Korea have cooled too, reducing demand for a haven.
Bullion traded at $1,268.08 an ounce on Friday, just above a low of $1,266.64 hit a day earlier, which was the weakest level in almost two months. Prices have succumbed to the latest barrage of hawkish comments from Federal Reserve officials, and better-than-forecast American factory orders, before monthly nonfarm payrolls data land later on Friday.
“The environment is now heading toward rising interest rates, which is bad news for the gold market,” Bob Takai, chief executive officer of Sumitomo Corp. Global Research Co., said by phone from Tokyo.
Prices have slumped more than 6 percent from a one-year high in early September. Fed funds futures now indicate about a 73 percent chance of a December rate hike after Fed Bank of San Francisco President John Williams said moderate growth and his outlook for higher inflation will allow the U.S. central bank to raise interest rates, while his counterpart in Philadelphia Patrick Harker signaled he’s anticipating an increase at the end of the year.
Investors will be watching the payroll and unemployment data from the U.S. later, according to Brian Lan, managing director of Singapore-based GoldSilver Central Pte. Gold is also floundering on lack of support from Chinese markets during the week-long national holiday and dollar strength, he said by email. The Bloomberg Dollar Spot Index is near the highest in almost three months.
Updated: October 6, 2017 01:03 PM