Gold Closes At One-Month Low On Fed Worries
November 03 2015 - 3:49PM
Dow Jones News
By Ira Iosebashvili
Gold prices fell to their lowest in a month on Tuesday, with
investors reluctant to bet on the precious metal ahead of U.S.
employment numbers later this week.
Gold for December delivery, the most actively traded contract,
closed down 1.9% at $1,114.14 a troy ounce on the Comex division of
the New York Mercantile Exchange, the lowest settlement since Oct.
2.
Federal Reserve officials kept short-term interest rates
unchanged near zero last week but opened the door wider to the Fed
raising rates at its final 2015 meeting in December. A strong U.S.
nonfarm payroll number on Friday would bolster the case for the Fed
to raise rates this year. Higher rates are bad news for gold, which
pays its holders nothing and struggles to compete with
yield-bearing investments when borrowing costs rise.
"People are taking the Yellen's words very seriously," said Bart
Melek, head of commodity strategy at TD Securities. "It's a foolish
investor that trades against the Fed."
Fed funds futures, used by investors and traders to place bets
on central-bank policy, showed on Tuesday that the market sees a
50% likelihood of a rate increase at the Fed's Dec. 15-16 policy
meeting, according to data from CME Group. The probability was 38%
before the Fed's interest-rate statement on Oct 28.
A stronger dollar added to the pressure on gold. The Wall Street
Journal Dollar Index, which gauges the U.S. currency against a
basket of 16 currencies, was recently up 0.1% at 88.63, less than a
point away from a multiyear low set in March. Gold, which is priced
in dollars, becomes more expensive to foreign investors when the
dollar rises.
Settlements
LBMA Gold Fix PM $1,123.10; Previous PM $1,134.00
Dec gold $1,114.10, down $21.80; Range $1,113.60-$1,138.00
Dec silver $15.239, down 16.9 cents; Range $15.200-$15.450
Jan platinum $962.20, down $16.20; Range $960.10-$984.40
Dec palladium $644.00, down $6.35; Range $639.80-$655.10
Write to Ira Iosebashvili at ira.iosebashvili@wsj.com
(END) Dow Jones Newswires
November 03, 2015 15:34 ET (20:34 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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