World Economy

Gold Plummets

Gold Plummets Gold Plummets

Spot gold was trading at three-month lows Monday morning, below $1,100/oz on COMEX for the first time since August on a strong US dollar, boosted Friday by strong US jobs data, Platts reported. Data showed Friday 271,000 new jobs were created in the US in October, whilst the unemployment rate dropped more than expected to 5%. “The US economy appears to be coping well with the global headwinds, the strength of its domestic economy clearly offsetting the problems faced by the manufacturing sector,” said Commerzbank in a note Monday. As a result, the “door is wide open” for a rate hike by the US Federal Reserve in December, according to the bank, who cite Fed Fund Futures at a 70% probability rate hike. Demand for non-yielding assets such as gold are expected to decline as interest rates move up from historical lows. Gold speculators sharply reduced their net long positions last week, according to the latest Commitment of Traders data released by the US Commodity Futures Trading Commission Monday.