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LONDON. – Gold prices slipped yesterday, heading towards near six-year lows as the dollar rose and stocks rebounded from losses associated with Friday’s attacks in Paris. Gold briefly rose on Monday to its highest in a week at $1,097.90 an ounce after the attacks prompted a flight to safety among investors, but it failed to maintain those gains.
The metal is now coming under pressure from expectations that the Federal Reserve is set to raise US interest rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding gold while boosting the dollar. Spot gold was down 0.4 percent at $1,078.70 an ounce at 1239 GMT, while US gold futures for December delivery were down $5,80 an ounce at $1,077.80. It is slipping back towards last week’s low of $1,074.26 an ounce, its weakest since February 2010.
“We think gold could go to $1,050 an ounce, if the Fed goes ahead with a rate hike in December,” Capital Economics analyst Simona Gambarini said. “That’s the main driver of the gold price, and the reason why we’ve retraced to these levels.”
Global shares rose sharply yesterday, clawing back all the ground lost the previous day as investors bet that the attacks on Paris would have little lasting impact on the economy. – Reuters.
Online Reporter