Gold futures fell moderately, retreating from a 3-week high. The pressure on the precious metal had prospect of a Fed hike by the end of this year. However, the decline in world stock markets restrains the further drop in prices.
“We believe that gold will be hard to resist double” headwind “, namely the strengthening of the dollar and the Fed raising interest rates”, – said Edward Meir, INTL FCStone.
The US Dollar Index, showing the US dollar against a basket of six major currencies, was trading lower by 0.15%. Since early October, the index increased by 3.3%. Since gold prices are tied to the dollar, a stronger dollar makes the precious metal more expensive for holders of foreign currencies.
Some support for gold gave an increase in physical demand on the eve of the Hindu festivals. At the end of the week India will celebrate the most important Hindu festival, Diwali. During this, gold is traditionally presented as a gift. In addition, analysts have noted that there are signs of strengthening demand from China – government data indicate that up to 2020 the import of gold into the country is likely to grow.
The cost of December futures for gold on the COMEX fell to $ 1269.5 per ounce.
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