LONDON: Gold hit a two-week low on Monday as upbeat comments from Federal Reserve officials on the US economy boosted expectations that the central bank could lift interest rates sooner rather than later.
The Fed’s No. 2 policymaker, Stanley Fischer, said on Sunday the Fed is close to hitting targets for full employment and 2pc inflation.
That followed comments last week from New York Fed President William Dudley that the labour market is improving, and from San Francisco Fed chief John Williams that waiting too long to lift rates could be costly for the economy.
Gold is highly sensitive to rising US interest rates, which boost the opportunity cost of holding non-yielding gold, while lifting the dollar, in which it is priced. Spot gold was down 0.3pc at $1,336.99 an ounce at 1330 GMT, while US gold futures for December delivery were down $4.90 an ounce at $1,341.30.
Speculators again cut their bullish positions in COMEX gold contracts in the week to Aug. 16. The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported an outflow of 4.5 tonnes last week, adding to the near 20-tonne drop in its holdings the previous week.
Silver hit a seven-week low of $18.77 an ounce and was later down 1.7pc at $18.95. Platinum was down 0.4pc at $1,105.60, while palladium was 0.3pc lower at $706.
Published in Dawn, August 23rd, 2016
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