Gold futures dropped the lowest since January as the dollar strengthened on outlooks for higher interest rates, reducing the demand for the metal. Silver dropped to a low of four years.
Gild retreated 5.6% in September, heading for the greatest loss from June 2013.
The Bullion, which had rallied in the year’s first half amid tensions in the Middle East and Ukraine, is heading towards its first quarterly decline of 2014. The gain in the dollar has diminished the demand for gold as a means of wealth protection. This had led to equities trading near record highs and expansion of US economic growth.
Business Week quoted Natixis analyst, Bernard Dahdah as having said, “The strengthening dollar has been attracting global investors at the expense of gold, whose safe haven status is no longer needed.”
December delivery gold futures dropped 0.6% to $1,211.70 per ounce on the New York Comex after hitting the lowest from January 2 at $1,204.30.
According to Fox Business, the stronger dollar is making the dollar-denominated precious metal more expensive to people trading in other currencies.
Phillip Futures investment analyst, Howie Lee said, “The pressure is definitely on for gold to end the year in the red. We see little in the way to stop gold’s downward slide, given that the Fed has made clear its intention to hike (rates) sooner (rather) than later and the Ukraine tensions have reached a fragile ceasefire.”
December delivery silver futures declined 2.6% to $17.115 per ounce. It had hit $17.08, the lowest from May 2010, and lost 18% in the quarter.
December delivery Palladium futures dropped 1.9% to $774.65 per ounce after hitting $772.40, the lowest from April 21. The price declined 15%, the largest drop from September 2011.
January delivery platinum futures dropped 0.4% to $1,304.10 per ounce, down 12 percent, the largest drop in over a year.
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