Gold prices slip to over 4-month low on early US Fed tapering fears

By Administrator_ India

Capital Sands

Gold slipped to a more than four-month low on Monday as solid U.S. jobs data stoked concerns of a sooner-than-expected interest rate hike, which could increase the opportunity cost of holding non-interest-bearing bullion.

Spot gold fell 1.1% to $1,744.25 per ounce by 0616 GMT.

In early Asia trade, prices slumped as much as 4.4% to $1,684.37, their lowest since March 31, triggered by some stop-loss selling. Trading was thin with Tokyo and Singapore on holiday.

U.S. gold futures were down 1.1% at $1,744.50.

The technical picture does not look good for gold and short-term negativity is likely to continue, said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

Data from the U.S. Labor Department showed employers hired the most workers in nearly a year in July and continued to raise wages.

That underscored remarks by Fed officials suggesting a sooner than anticipated roll-back of pandemic-era stimulus on the back of a solid labor market recovery.

The data helped lift the benchmark U.S. 10-year Treasury yields, hurting gold’s appeal as an inflation hedge.

Meanwhile, the dollar index hit a two-week high on Monday.

“Gold’s metal will probably get tested into the CPI data this week,” said Stephen Innes, a managing partner at SPI Asset Management, adding that a strong inflation number could increase the probability of an early interest rate hike.

Silver slumped as much as 7.5%, hitting a more than the eight-month low of $22.50 per ounce earlier in the session. It was last down 1.7% at $23.93.

Platinum fell 0.1% to $978.60, having earlier hit a low since November 2020 of $959.93. Palladium edged 0.1% higher to $2,629.87.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.


Leave a Reply

Your email address will not be published. Required fields are marked *

*
*