LONDON: Gold touched its lowest in 8-1/2 months on Thursday as the dollar jumped to a four-year peak after the Federal Reserve indicated it could raise borrowing costs faster than expected.

Spot gold fell to its lowest since Jan. 2 at $1,216.01 an ounce early on Thursday and was trading unchanged on the day at $1,222.54 by 1429 GMT. The metal had lost 1 per cent in the previous session.

Before Thursday, gold had dropped for four sessions out of six on worries of an early US rate increase. The metal has benefited from low interest rates in the years after the credit crisis in 2008, as these encouraged investors to put money into the non-interest-bearing metal.

Silver was down 0.1pc at $18.44 an ounce, having touched its lowest since June 2013.

Published in Dawn, September 19th, 2014