Gold Prices Sit Near Ten-And-A-Half-Month Low As Dollar Rallies On Fed

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Gold Prices Sit Near Ten-And-A-Half-Month Low As Dollar Rallies On Fed

Posted on : Friday 16th of December 2016

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Gold prices held near their weakest level in ten-and-a-half months on Friday as the US dollar surged to multi-year peaks after the Federal Reserve raised interest rates and projected further rate hikes in 2017.

Spot gold was steady at $1,128.70 an ounce by 0101 GMT (6:31 a.m. in India), after touching its weakest level since February 2 at $1,122.35 in the previous session. Gold fell nearly 1.4 per cent on Thursday, its biggest percentage fall in three weeks.

The metal was down more than 2.5 per cent for the week, on track for its sixth consecutive weekly decline. 

"US gold futures were up 0.1 per cent at $1,130.90 an ounce, after falling nearly 3 per cent in the prior session."

The dollar stood tall on Friday, on track for hefty gains for the week, on expectations of more US Federal Reserve interest rate hikes.

The dollar index, which measures the greenback against a basket of currencies, was up 0.1 per cent at 103.140.

Rising rents lifted underlying US inflation in November, pointing to a steady build-up of price pressures in the economy that could support more interest rate increases from the Federal Reserve next year.

The prospect of further monetary policy tightening in 2017 was also bolstered by other data on Thursday showing a drop in the number of Americans filing for unemployment aid last week.

Holdings of the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.84 per cent to 842.33 tonnes on Thursday.

Russia's Petropavlovsk downgraded its 2016 gold output forecast due to mining disruptions at Pioneer, the company's largest mine.

Silver miner Hochschild Mining Plc said production at its Pallancata silver mine in Peru had been temporarily suspended, as members of a local community blocked a road and demanded renegotiation of agreements for land easements.

The Royal Mint is to launch its first range of platinum bullion coins and bars next year, it said in a statement on Thursday, in partnership with the World Platinum Investment Council.

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