Saturday, 10 September 2016

Live Gold Prices : Latest Price Of Gold Today 10-Sep-2016

Gold Prices Drop on Speculation Over Rate Increase   

Gold fell for the third day in a row Friday, under pressure from a stronger U.S. dollar and concerns that the Federal Reserve may raise interest rates sooner than expected. Gold for December delivery settled down 0.5% at $1,334.50 a troy ounce on the Comex division of the New York Mercantile Exchange. Federal Reserve Bank of Boston President Eric Rosengren spoke Friday in favor of raising rates, sparking speculation that an interest-rate increase could come as early as September.  
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Recent disappointing U.S. economic data, including nonfarm payrolls and ISM nonmanufacturing reports, buoyed gold prices and diminished expectations for a rate increase in September. However, the precious metal has also been susceptible to remarks from Fed officials, leading to sharp price swings in a thin market. “This week almost feels like it’s still August. There’s no participation in the market and all of a sudden, September might be on the table again, “ said Peter Hug, global trading director at Kitco Metals. “It’s just keeping the market on edge and that’s why were getting this choppiness.”  

The possibility of a rate increase in September has made investors nervous, prompting some to scale back long positions in gold, Mr. Hug said. Higher rates tend to hurt gold, which pays its holders no return and struggles to compete with yield-bearing assets when borrowing costs rise. Expectations for an imminent rise in interest rates have also lifted the dollar. The WSJ Dollar Index, which measures the dollar against 16 other currencies, was recently up 0.4% at 86.51. A stronger U.S. currency makes dollar-denominated gold becomes more expensive to foreign buyers.

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