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Singapore - Gold dipped below $1 200 an ounce in its longest losing run since October as positive US economic figures reinforce expectations that yields on other investments will rise this year.
Bullion for immediate delivery fell as much as 0.3% to $1 197.70, the lowest since January 31, and was at $1 198.57 at 08:22, according to Bloomberg generic pricing. The metal is down 2.9% this week after dropping on all five days as yields on 10-year Treasurys extended gains, making non-interest bearing assets less attractive.
The precious metal has been hit by Federal Reserve officials including chair Janet Yellen talking up the prospect of higher rates this month. Better-than-expected US private jobs data this week also boosted the dollar before official payrolls figures on Friday, which is the last major piece of economic news before the Fed meets next week.
The European Central Bank, meanwhile, signaled it won’t add to stimulus as growth picks up.
“If the data continues to be as good as it was, or improves, we could see the Fed move toward further hawkishness," said Brad Yates, head of trading for Elemetal, one of the biggest US gold refiners. “That could hurt gold.”
After the Fed raised rates once in 2015 and again in 2016, the pace may quicken this year.
The so-called dot plot illustrating policy makers’ projections suggests three increases this year. While economists see US non-farm payrolls declining, possibly supporting gold, their projections have underestimated employment growth in February for five years in a row.
In other precious metals:
Spot silver is down 5.8% this week, heading for the biggest decline since the five days ended October 7. Palladium fell 3.7% this week, while platinum slumped 6.3%, the most since November 2015. The World Platinum Investment Council raised its 2017 platinum supply deficit to 120 000 ounces from 100 000 ounces on a resilient car market. The metal is used in auto-catalysts that help remove pollutants from vehicle exhaust.
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