LONDON: Gold fell for a third straight session on Wednesday on pressure from a firmer dollar amid speculation that the next chair of the US Federal Reserve could be a policy hawk.

Spot gold was down 0.4 per cent at $1,279.58 an ounce at 1155 GMT, having touched its lowest since Oct 9 at $1,279.

US gold futures for December delivery were off 0.4pc at $1,281.40. “Interest rate hikes had not been fully priced in for next year. That has changed massively following speculation that (Fed Governor Jerome) Powell might become the next chairman,” said Commerzbank analyst Carsten Fritsch.

US President Donald Trump has a pool of five candidates to choose from for the next chair of the Fed and is likely to announce his choice before going to Asia in early November, a source familiar with the situation said. Jerome Powell will likely be the next Federal Reserve chairman, according to a slim majority of economists in a Reuters poll, though most of them said that incumbent Janet Yellen would be the best option.

MKS precious metals trader Sam Laughlin said the $1,280 an ounce support remained intact but further weakness could test the 100-day moving average at $1,275. Support below that level sat between the early October low of $1,260 and the 200-day moving average at $1,257, he said.

Published in Dawn, October 19th, 2017