adminSINGAPORE. – Gold was trading near its lowest in more than a week yesterday, hurt by uncertainty over when the Federal Reserve will begin to raise US rates. Spot gold was steady at $1 166,10 per ounce by 3.45am GMT. It fell to $1 163,50 on Wednesday, the lowest since October 13, before paring some losses to close down 0,8 percent. Bullion, as a non-interest-paying asset, has been under pressure due to uncertainty over the timing of the first US rate hike in nearly a decade, losing about 1,5 percent for the year.
Market expectation for a hike has shifted to next year in recent weeks amid concern about the global economy, although some have not completely ruled out a rate rise in December on recent robust US economic data.
“Our base case remains for higher US real rates and lower gold prices, albeit with there being risks that the gold price weakness is pushed out further should the Fed surprise us and remain on hold in December,” Goldman Sachs said in a note.
Its economists are about 60 percent confident regarding a December hike. Goldman kept its forecasts unchanged, expecting gold prices at $1 100 in three months, $1 050 in six months and $1 000 in 12 months.
Traders will be eyeing US data due later in the session for clues about the strength of the economy and how it could affect the Fed’s monetary policy. – Reuters.
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