Gold steady after earlier losses amid worries over US rate hike timing

By: | Published: September 28, 2015 9:42 AM

Gold prices had dropped 0.7 percent on Friday after Federal Reserve chair Janet Yellen said the US central bank would begin to raise rates this year.

GoldGold got off to a quiet start to the week on Monday, struggling to recover from the previous session’s losses as investors worried over the timing of a US interest rate hike. (Express Photo)

Gold got off to a quiet start to the week on Monday, struggling to recover from the previous session’s losses as investors worried over the timing of a US interest rate hike.

FUNDAMENTALS
Spot gold was little changed at $1,146.70 an ounce by 0040 GMT.

The metal had dropped 0.7 percent on Friday after Federal Reserve chair Janet Yellen said the US central bank would begin to raise rates this year.

Data on Friday also supported the view. US gross domestic product rose at a 3.9 percent annual pace in the second quarter, up from 3.7 percent reported last month.

Earlier in the month the Fed delayed a long-anticipated rise in US rates, sparking volatility in global markets.

Gold had benefited from ultra-low rates, but the non-interest-paying metal could see demand take a hit once rates start going up.

Several Fed officials are scheduled to speak this week, keeping the focus on US monetary policy. Bullion traders will also be closely monitoring economic data, including non-farm payrolls data on Friday, to gauge the strength of the economy.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.57 percent to 684.14 tonnes on Friday.

Hedge funds and money managers raised their bullish bets in COMEX gold and silver futures and in the week to September 22, US Commodity Futures Trading Commission data showed on Friday.

Among other precious metals, platinum steadied on Monday, after posting its biggest weekly drop since July on Friday.

The metal had fallen to a 6-1/2-year low last week on fears that the Volkswagen emissions scandal could dent demand for diesel cars, where it is used in catalysts.

But there is a glimmer of hope for the metal with the prospect of tighter emissions legislation. Upcoming European legislation on CO2 emissions will make it harder for authorities to back a war on diesel.

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