Gold Price Slips on Interest Rate Hike Prospect, Dollar Also Falls
Investing.com - Gold prices fell on Thursday and were on track to record a fifth straight monthly decline on expectations of a higher interest rates.
Gold futures for December delivery was trading at $1,209.5 per troy ounce, down by 0.16% at 12:32AM ET (04:32 GMT) on the Comex division of the New York Mercantile Exchange.
Markets widely expect the Federal Reserve to hike interest rates in September and December following last week’s Jackson Hole symposium, where Fed’s chairman Jerome Powell defended policy of interest rate hikes, adding that he expected a low but gradual growth of interest rates as inflation is reaching the country’s 2% target.
Powell’s speech came after U.S. President Donald Trump said earlier this month that he was “not thrilled” about the Fed’s decision to hike rates. A potential hike in interest rates in general decreases demand for gold, which yields no interests.
Meanwhile, the U.S. reported on Wednesday the strongest growth of its second-quarter GDP in a decade, expanding at an annual rate of 4.2%.
“Investors are grappling amid positive data coming through [from the U.S.] and that’s why prices [of gold] are stuck just above $1,200 at the moment without any sort of clear outlook, especially around the rates for 2019,” said ANZ analyst Daniel Hynes.
The U.S. Dollar Index, which tracks the greenback against a basket of currencies, dropped 0.03% to 94.57. The index picked up slightly from a four-week low of 94.434 on Tuesday.
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