Gold prices hold near 5-month low

Marcus Newton
December 14, 2017

Gold futures on the COMEX division of the New York Mercantile Exchange fell to a new five-month low on Tuesday amid anticipation of another interest rate hike.

The Federal Reserve is widely expected to raise the fed funds target range by a quarter point at the conclusion of its two-day policy meeting at 2:00PM ET (1900GMT) on Wednesday, which would put it in a range between.

Gold is sensitive to rising United States interest rates, as these increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced.

Spot gold was up 0.25 per cent at United States dollars 1,250.93 an ounce at early trade. On Tuesday it touched $1,235.92, the lowest since July 20.

Globally, gold edged up 0.09 per cent to United States dollars 1,249.30 an ounce and silver by 0.03 per cent to USD 15.82 an ounce in Singapore.

Yellen's successor, Fed Governor Jerome Powell, has hinted that he has a cautious approach to rate increases.

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Global shares were close to record highs, continuing a rally that has attracted investment away from gold.

Analysts at Standard Chartered noted that gold would likely recover quickly from its recent lows if the meeting outcome proves to be a dovish hike.Reuters technicals analyst Wang Tao said spot gold may bounce moderately to a resistance at $1,250 per ounce, as it has stabilized around a support at $1,239.

As for other precious metals, silver for March delivery edged down 11.7 cents, or 0.74 percent, to settle at 15.668 dollars per ounce.

Globally, fell 0.54 per cent to United States dollars 1,241.40 an ounce in NY in yesterdays trade.

Palladium was up 0.3 percent at $1,015.90 an ounce.

Other reports by MaliBehiribAe

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