Gold edges lower for a third day on uncertainty of US rate hike : Aug 23, 2016, 11.01 AM
Gold edges lower for a third day on uncertainty of US rate hike
Spot gold slipped 0.1 percent to USD 1,337.55 an ounce at 0502 GMT.
The metal hit a two-week low on Monday. Gold edged lower on Tuesday, dropping for a third day, as investors are reducing their exposure to the yellow metal as the US may raise interest rates as early as September. Spot gold slipped 0.1 percent to USD 1,337.55 an ounce at 0502 GMT.
The metal hit a two-week low on Monday. US gold dropped 0.1 percent at USD 1,341.90 an ounce. "People are worried that September rate hike is not completely ruled out as a possibility. Although the medium-to-long term prospects for a series of rate hikes is not really high, there should be some short-term pressure on gold," said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "Investor's momentum has been lagging for sometime.
The exchange traded funds have not risen significantly and that should be a short-term bearish signal for gold," To said, adding that gold might soon test the level of USD 1,280-USD 1,300. US Federal Reserve Chair Janet Yellen may provide more clarity on an interest rate increase at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, starting on Aug. 25.
The Fed last week sent mixed messages on an increase in its July meeting minutes, though some members have suggest rates could rise as soon as September. "We likely will see more weakness in the precious group at least until Fed Chair Yellen provides a little more clarity about the future course of interest rates on Friday," INTL FCStone analyst Edward Meir said in a note. Gold is highly sensitive to rising US interest rates, which boost the opportunity cost of holding non-yielding gold, while lifting the dollar, in which it is priced.
"Weaker charts patterns will likely be another negative, particularly in silver, which has now opened up a gap on charts," said Meir. Spot silver was up 0.5 percent at USD 18.95 an ounce. It fell over 2 percent and hit an over seven-week low on Monday. "We have been concerned about the speculative length that has been building up in silver for sometime now and so it its steeper decline relative to gold doesn't come as a surprise," Meir said. Platinum edged higher 0.3 percent at USD 1,102.60, hovering near about four-week low hit in the previous session. Palladium dropped 0.5 percent at USD 686.85.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.25 percent to 958.37 tonnes on Monday. Spot gold may revisit its Aug. 22 low of USD 1,331.35 per ounce, as suggested by its wave pattern and a triangle, according to Reuters technical analyst Wang Tao.
Gold edges lower for a third day on uncertainty of US rate hike
Spot gold slipped 0.1 percent to USD 1,337.55 an ounce at 0502 GMT.
The metal hit a two-week low on Monday. Gold edged lower on Tuesday, dropping for a third day, as investors are reducing their exposure to the yellow metal as the US may raise interest rates as early as September. Spot gold slipped 0.1 percent to USD 1,337.55 an ounce at 0502 GMT.
The metal hit a two-week low on Monday. US gold dropped 0.1 percent at USD 1,341.90 an ounce. "People are worried that September rate hike is not completely ruled out as a possibility. Although the medium-to-long term prospects for a series of rate hikes is not really high, there should be some short-term pressure on gold," said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "Investor's momentum has been lagging for sometime.
The exchange traded funds have not risen significantly and that should be a short-term bearish signal for gold," To said, adding that gold might soon test the level of USD 1,280-USD 1,300. US Federal Reserve Chair Janet Yellen may provide more clarity on an interest rate increase at a speech during an annual meeting of central bankers in Jackson Hole, Wyoming, starting on Aug. 25.
The Fed last week sent mixed messages on an increase in its July meeting minutes, though some members have suggest rates could rise as soon as September. "We likely will see more weakness in the precious group at least until Fed Chair Yellen provides a little more clarity about the future course of interest rates on Friday," INTL FCStone analyst Edward Meir said in a note. Gold is highly sensitive to rising US interest rates, which boost the opportunity cost of holding non-yielding gold, while lifting the dollar, in which it is priced.
"Weaker charts patterns will likely be another negative, particularly in silver, which has now opened up a gap on charts," said Meir. Spot silver was up 0.5 percent at USD 18.95 an ounce. It fell over 2 percent and hit an over seven-week low on Monday. "We have been concerned about the speculative length that has been building up in silver for sometime now and so it its steeper decline relative to gold doesn't come as a surprise," Meir said. Platinum edged higher 0.3 percent at USD 1,102.60, hovering near about four-week low hit in the previous session. Palladium dropped 0.5 percent at USD 686.85.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.25 percent to 958.37 tonnes on Monday. Spot gold may revisit its Aug. 22 low of USD 1,331.35 per ounce, as suggested by its wave pattern and a triangle, according to Reuters technical analyst Wang Tao.
