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Gold struggles near 6-year lows on Fed rate hike bets

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Investing.com -

Investing.com - Gold struggled near six-year lows in holiday-thinned trade on Thursday, after a recent batch of upbeat U.S. economic data reinforced expectations for a Fed rate hike next month.

Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $1.20, or 0.11%, to trade at $1,071.20 a troy ounce during European morning hours.

Trade volumes were expected to remain light on Thursday, with Comex floor trading scheduled to remain closed for Thanksgiving. An abbreviated session was slated for Friday.

On Wednesday, prices shed $3.80, or 0.35%, after upbeat data reinforced expectations the Federal Reserve will raise rates for the first time in nearly a decade at its December 15-16 meeting.

The U.S. Commerce Department reported on Wednesday that new home sales rose by 10.7% to 495,000 units last month.

The report came shortly after the U.S. Department of Labor said initial jobless claims declined by 12,000 last week to 260,000. Analysts expected jobless claims to fall by 2,000.

A separate report showed that durable goods orders jumped 3.0% in October, easily surpassing forecasts for 1.5%. Core durable goods orders, excluding volatile transportation items, rose 0.5%, beating expectations for an increase of 0.3%.

Most Fed officials believe there is a strong case to begin raising interest rates next month, as long as U.S. economic data does not disappoint in the coming weeks.

Gold futures are down more than 6% so far in November amid expectations for a December liftoff in U.S. interest rates. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

The U.S. dollar held near the highest level since April against a basket of six other major currencies, amid growing expectations for tighter monetary policy in the U.S. in the coming months. Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

Meanwhile, silver futures for December delivery inched up 1.5 cents, or 0.11%, to trade at $14.17 a troy ounce. Prices hit $13.85 earlier this week, the weakest since August 2009.

Elsewhere in metals trading, copper surged on Thursday, along with other base metals such as nickel and zinc, as China regulators were said to consider a probe into metal short-selling in the local market.

Prices received another boost amid reports that Chinese smelters are planning a meeting to consider taking action against falling prices.

Copper is down more than 10% so far this month as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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