Gold suffers worst run as slide below $1 200 looms | Fin24

Gold suffers worst run as slide below $1 200 looms

Mar 09 2017 09:19
Bloomberg: Ranjeetha Pakiam

Singapore - Gold’s feeling the strain. Bullion’s being tugged back down toward $1 200 an ounce in the worst losing run since October as positive US economic data reinforce expectations that interest rates will probably be raised several times this year, starting with a hike next week.

Bullion for immediate delivery lost as much as 0.4% to $1 203.98 an ounce, the lowest level since February 1, and traded at $1 204.39 at 08:47, according to Bloomberg generic pricing. It’s lower for a fourth day, while yields on 10-year Treasuries up for a ninth session.

The precious metal has been thrown onto the defensive after Federal Reserve officials including Chair Janet Yellen talked up the chances of tightening, boosting the odds of an imminent hike and recasting expectations for further moves over the course of the year.

Gold’s latest leg down followed the release of better-than-expected US private jobs data midweek, boosting the dollar ahead of the release of official monthly payrolls figures on Friday.

“Three weeks ago the possibility of a rate hike in March was very small, but now it’s 100%,” said Bob Takai, chief executive officer of Sumitomo. Global Research, who remains bullish on gold given the uncertainties that may come with Donald Trump’s presidency.

“Once the rate is raised in March, it is going to take a lot of time for the Fed to move once again.”

After raising rates just a single time in 2015 and also in 2016, the pace may quicken this year.

The so-called dot plot from Fed policy makers shows an expectation for three increases this year, and last Friday, Yellen dropped hints the bank might end up having to hike them more than planned in 2017.

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