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| American interest rate hike fueled expectations of a decrease in the price of gold |
Cyber Daily News - Gold futures on the COMEX division of the New York Mercantile Exchange
ended up falling on Wednesday (Thursday morning GMT), due to
expectations of the Fed's interest rate hikes in December suppress
precious metals prices.
The most active gold contract for December delivery dropped 3.6 dollars, or 0.33 percent, to settle at 1084.90 dollars per ounce, Xinhua reported.
Low volume trade mark Wednesday as banks in the US were closed while the market remains open to US Veterans Day holiday. No release important news, and no US economic data releases on Wednesday.
The closing price of gold was at its lowest level in the last six years, because there are indications that investors are worried about low physical demand for the precious metal as a result of the global economy continues to slow down.
Analysts believe that the trader expectations for US interest rate increases during the meeting of the Federal Open Market Committee (FOMC) December put pressure on precious metals.
Analysts originally predicted a rate hike will be delayed until 2016, but the FOMC meeting at the end of October to leave the door open for the Fed to raise rates before the end of 2015.
According Fedwatch tool CMEGroup, the current implied probability for a rate hike in December was at 68 percent.
The Fed's interest rate increases pushed investors away from gold and towards assets with yield, because the precious metal is not wearing the interest rate.The Fed has not raised interest rates in nearly 10 years, and interest rates are already near zero since the financial crisis in 2008.
Gold is prevented from further decline as the US dollar index, which measures the greenback against a basket of other major currencies, was down 0.2 becomes 99.01 at 17:55 GMT.
Gold and the dollar usually move in opposite directions, which means that if the dollar goes down then gold futures will rise, because gold is priced in the US unit more expensive for investors.
Silver for December delivery fell 9.3 cents, or 0.65 percent, to close at 14.263 dollars per ounce. Platinum for January delivery dropped 16.4 dollars, or 1.82 percent, to close at 883.10 dollars per ounce.
The most active gold contract for December delivery dropped 3.6 dollars, or 0.33 percent, to settle at 1084.90 dollars per ounce, Xinhua reported.
Low volume trade mark Wednesday as banks in the US were closed while the market remains open to US Veterans Day holiday. No release important news, and no US economic data releases on Wednesday.
The closing price of gold was at its lowest level in the last six years, because there are indications that investors are worried about low physical demand for the precious metal as a result of the global economy continues to slow down.
Analysts believe that the trader expectations for US interest rate increases during the meeting of the Federal Open Market Committee (FOMC) December put pressure on precious metals.
Analysts originally predicted a rate hike will be delayed until 2016, but the FOMC meeting at the end of October to leave the door open for the Fed to raise rates before the end of 2015.
According Fedwatch tool CMEGroup, the current implied probability for a rate hike in December was at 68 percent.
The Fed's interest rate increases pushed investors away from gold and towards assets with yield, because the precious metal is not wearing the interest rate.The Fed has not raised interest rates in nearly 10 years, and interest rates are already near zero since the financial crisis in 2008.
Gold is prevented from further decline as the US dollar index, which measures the greenback against a basket of other major currencies, was down 0.2 becomes 99.01 at 17:55 GMT.
Gold and the dollar usually move in opposite directions, which means that if the dollar goes down then gold futures will rise, because gold is priced in the US unit more expensive for investors.
Silver for December delivery fell 9.3 cents, or 0.65 percent, to close at 14.263 dollars per ounce. Platinum for January delivery dropped 16.4 dollars, or 1.82 percent, to close at 883.10 dollars per ounce.
