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Gold Climbs In Asian Session Ending The Worse Month in 2 1/2 Years

By:
Barry Norman

Gold climbed in Asia as the new month began. Traders took advantage of the lower prices to buy up the commodity which then reversed losses and traded in

Gold Climbs In Asian Session Ending The Worse Month in 2 1/2 Years

Gold Climbs In Asian Session Ending The Worse Month in 2 1/2 Years
Gold Climbs In Asian Session Ending The Worse Month in 2 1/2 Years
Gold climbed in Asia as the new month began. Traders took advantage of the lower prices to buy up the commodity which then reversed losses and traded in the green adding $6.20 to trade at 10.71.50. This phenomenon is not all that surprising in fact it is more typical as gold gives back gains in the European session. Slowing Asian demand, despite the recent slide in prices, also dampened the sentiment around the bullion. As Reuters reported, China’s net gold imports from main conduit Hong Kong fell in October from a ten-month high reached in the previous month.

While, India’s gold buying in the key December quarter is likely to fall to the lowest level in eight years, hurt by poor investment demand and back-to-back droughts. In another evidence of waning investors’ confidence in the yellow metal, assets in SPDR Gold Trust, the world’s top gold-backed exchange-traded fund, fell 0.14% to 654.80 tonnes on Friday, the lowest since September 2008.

Looking ahead, gold prices are expected to remain suppressed heading into the key US jobs report this week, which is likely to pave the way for the first rate hike in the US in almost ten years.

gold prices

Gold extended losses on Monday, dropping towards its lowest level in nearly six years, and was poised to record its steepest monthly slide in 2-1/2 years on prospects of a U.S. interest rate hike this year. The precious metal has fallen out of favor as investors position themselves for the first U.S. rate hike in nearly a decade. The Federal Reserve is expected to raise rates at its next policy meeting on Dec. 15-16. Investors believe gold, as a non-interest-paying asset, will take a hit to demand from higher rates as the dollar gains. Silver took its cues from gold to trade at 14.11 adding 60 points while platinum added $9 to 841.00. Based on the most-active contracts, gold futures lost roughly 6.7% for the month of November—their largest monthly percentage drop since June 2013. The monthly dollar loss of about $76.10 an ounce was the biggest since July of this year.

Meanwhile, the U.S. Federal Reserve’s “dreaded” December meeting is almost here, and “it has been chatter about the Fed daring to raise rates from zero that has seen gold and silver slide to these new multiyear lows,” said Adrian Ash, head of research at BullionVault.

Higher interest rates can be negative for gold, which tends to benefit from loser monetary policy. The Fed’s two-day policy meeting will conclude Dec. 16. The European Central Bank will hold a policy meeting this Thursday. Monthly data on U.S. nonfarm payrolls will be released Friday.

us dollar

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