Gold fell to the lowest in almost a week on speculation the Federal Reserve is moving closer to raising US interest rates amid an improving economy. Silver declined.
The Fed meets Dec. 16-17 to debate the pace of raising borrowing costs after holding interest rates near zero since 2008 to boost growth. Economists and Fed officials surveyed by Bloomberg expect higher US rates in 2015. Rising rates cut gold’s allure because bullion generally offers investors returns only through price gains.
The Fed “may change the wording of its communique and signal an interest rate hike in the near future,” Commerzbank AG analysts including Daniel Briesemann said in a report today. “The gold price is likely to come under pressure ahead of the rate hikes and pull silver down with it.”
Gold for February delivery fell 0.8 percent to $1,213.30 an ounce at 7:20 a.m. on the Comex in New York. The price earlier touched $1,210.20, the lowest since Dec. 9. Gold for immediate delivery declined 0.8 percent to $1,213.13 in London, according to Bloomberg generic pricing.
Money managers’ net-long position in US futures and options rose for a fourth week in the period to Dec. 9, the longest stretch of increases since July, government data show. The metal climbed 2.7 percent in New York last week, the most since June, as the dollar declined and global stocks tumbled amid a slump in energy prices.
The Bloomberg Dollar Spot Index added 0.2 percent Monday. The gauge rallied to a five-year high this month. Holdings in gold-backed exchange-traded products fell 1.5 metric tons to 1,611.3 tons as of Dec. 12, data compiled by Bloomberg show. They reached the lowest since 2009 on Dec. 8.
Silver futures for March delivery declined 1 percent to $16.89 an ounce in New York, after rising in the past two weeks. Platinum for January delivery slipped 0.9 percent to $1,220.90 an ounce. Palladium for March delivery retreated 0.3 percent to $813.75 an ounce.
Swiss Gold to India
Amid concerns of bullion trade being used for routing of black money, Switzerland’s gold exports to India have risen further and is fast approaching Rs one-trillion ($15.8b) mark for the entire 2014.
The Swiss gold exports to India stood at over 2.8 billion Swiss francs ($2.9b) in October, up from about 2.2 billion Swiss francs in the previous month, shows the latest data from the Swiss Customs Administration.
This has taken the total Swiss gold exports to India since January this year to 14.2 billion Swiss francs, as per the data compiled by Switzerland’s cross-border trade monitoring agency.
This surge in gold shipments has made India the largest destination for the yellow metal exports from Switzerland.
