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  1. Gold price set to snap 2 week winning streak on US rate hike fears

Gold price set to snap 2 week winning streak on US rate hike fears

Gold price hovered near its lowest in over a week on Friday and was poised to snap a two-week winning streak on a stronger dollar and a boost to expectations for a U.S. rate rise this year.

By: | Published: October 23, 2015 10:02 AM
Gold prices

Festive demand for gold in India got off to a tepid start, with local prices heavily discounted to the global benchmark, a bearish sign at a time when buying is typically strong. (Reuters)

Gold price hovered near its lowest in over a week on Friday and was poised to snap a two-week winning streak on a stronger dollar and a boost to expectations for a U.S. rate rise this year.

Spot gold was steady at $1,165.06 an ounce by 0029 GMT. It fell to $1,162.50 in the previous session, the lowest level since Oct. 13.

For the week, the metal is down about 1 percent, the sharpest decline in six weeks and after posting two straight weekly gains.

U.S. gold futures were down 1.5 percent for the week, also the biggest loss since the week ended Sept. 11. Bullion, as a non-interest-paying asset, has been hurt by uncertainty over the timing of the first U.S. rate hike in nearly a decade.

Rate rise expectations have largely been pushed out to next year over concerns about the health of the global economy.

An increase in December has not been completely ruled out and those expectations were reinforced by upbeat U.S. housing and labour market data on Thursday.

U.S. home resales rebounded strongly in September and new applications for unemployment benefits hovered around 42-year lows last week, pointing at solid domestic fundamentals even as the global economy falters.

The dollar was supported by the data and the euro skidded after the European Central Bank opened the door to more stimulus as early as December.

A stronger dollar makes gold more expensive for holders of other currencies. India’s central bank said on Thursday it will allow lenders to count short-term bullion deposits under the gold monetisation scheme as part of their cash reserve ratio or statutory liquidity ratios, increasing the appeal of the plan for the sector.

China Construction Bank will join the twice-daily electronic auction process to set the benchmark price of gold, its operator Intercontinental Exchange said in a statement on Thursday.

Festive demand for gold in India got off to a tepid start, with local prices heavily discounted to the global benchmark, a bearish sign at a time when buying is typically strong.

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