Gold moderately cheaper, returning to five-week low, movecaused by the strengthening of the dollar and the recent comments by Fed officials on rate hikes.
The dollar index, which shows the relationship of the US dollar against a basket of six major currencies, rose 0.5%. Generally, a strong dollar puts pressure on gold, as it reduces the metal’s appeal as an alternative asset and increases the price of dollar-denominated commodities for holders of other currencies.
Today, Fischer noted that the pace of rate hikes will depend entirely on the situation in the economy. ” We determine the rate based on the incoming data. I do not think that at the time when we start to raise rates, we will know whether it will be one hike or more. It all depends on what will happen in the economy “, – he said. According to the futures market, the probability of a rate hike is 24% in September and 53.6% in December.
“As investors are pricing in an increasing chance of a hike before the end of the year, gold is likely to continue to remain under pressure” – said MKS experts.
Gradually, the market’s attention shifted to Friday’s data on US labor market, which will help understand whether the Fed will raise rates in the near future.
The cost of October futures for gold on COMEX fell to $ 1317.4 per ounce.
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