Gold on track for biggest weekly loss in more than four months
by Clara Denina,
2016-03-24 17:10:31.0
LONDON — Spot gold rebounded after hitting a four-week low on Thursday, but prices were still poised for their biggest weekly loss since November as the prospect of more US interest rate rises has bolstered the dollar.
Hawkish comments from several US Federal Reserve officials this week put investors on guard for the possibility of at least two rates increases this year, with the first potentially as soon as next month, triggering a widespread correction across commodities. Brent crude oil plunged 3% this week, while copper prices fell below $5,000 a tonne.
Spot gold slipped 0.6% in early trade on Thursday to $1,212.20 an ounce, its weakest since February 26, before rebounding to $1,221.26, up 0.1%, by 2.51pm GMT, as the dollar pared some gains after weekly US jobs data.
Gold was on track for a 2.7% weekly loss, largely because of Wednesday’s 2% decline.
London and many other gold markets will be closed on Friday and Monday for the Easter holiday.
US gold slipped 0.2% to $1,221.50 an ounce.
"In February there were a lot of concerns about a dovish stance from the Fed, while economists are now starting to figure that there could be two (rate rises) and that would mean some pressure on gold," ING Bank senior strategist Hamza Khan said.
The dollar was up 0.2% versus a basket of main currencies, heading for a fifth day of gains, its best run in almost a year.
Data on Thursday showed the number of Americans filing for unemployment benefits rose modestly last week, but revisions for prior weeks showed the labour market was much stronger than previously thought. St. Louis Fed President James Bullard joined a chorus of officials in highlighting the possibility of at least two rate increases this year, with the first perhaps as soon as April.
Earlier in the week, Philadelphia Fed President Patrick Harker said the central bank should consider another increase as early as next month if the US economy continues to improve, while Chicago Fed President Charles Evans also said he expected two more rate increases this year.
Other central banks, however, will keep their ultra-loose monetary policies, which should cushion the Fed’s tightening impact on gold, Commerzbank analyst Daniel Briesemann said. Silver gained 0.2% to $15.25, platinum was down 0.3% at $955.40 and palladium fell 1.4% to $571.45.
Reuters
Picture: AFP PHOTO/OZAN KOSE
LONDON — Spot gold rebounded after hitting a four-week low on Thursday, but prices were still poised for their biggest weekly loss since November as the prospect of more US interest rate rises has bolstered the dollar.
Hawkish comments from several US Federal Reserve officials this week put investors on guard for the possibility of at least two rates increases this year, with the first potentially as soon as next month, triggering a widespread correction across commodities. Brent crude oil plunged 3% this week, while copper prices fell below $5,000 a tonne.
Spot gold slipped 0.6% in early trade on Thursday to $1,212.20 an ounce, its weakest since February 26, before rebounding to $1,221.26, up 0.1%, by 2.51pm GMT, as the dollar pared some gains after weekly US jobs data.
Gold was on track for a 2.7% weekly loss, largely because of Wednesday’s 2% decline.
London and many other gold markets will be closed on Friday and Monday for the Easter holiday.
US gold slipped 0.2% to $1,221.50 an ounce.
"In February there were a lot of concerns about a dovish stance from the Fed, while economists are now starting to figure that there could be two (rate rises) and that would mean some pressure on gold," ING Bank senior strategist Hamza Khan said.
The dollar was up 0.2% versus a basket of main currencies, heading for a fifth day of gains, its best run in almost a year.
Data on Thursday showed the number of Americans filing for unemployment benefits rose modestly last week, but revisions for prior weeks showed the labour market was much stronger than previously thought. St. Louis Fed President James Bullard joined a chorus of officials in highlighting the possibility of at least two rate increases this year, with the first perhaps as soon as April.
Earlier in the week, Philadelphia Fed President Patrick Harker said the central bank should consider another increase as early as next month if the US economy continues to improve, while Chicago Fed President Charles Evans also said he expected two more rate increases this year.
Other central banks, however, will keep their ultra-loose monetary policies, which should cushion the Fed’s tightening impact on gold, Commerzbank analyst Daniel Briesemann said. Silver gained 0.2% to $15.25, platinum was down 0.3% at $955.40 and palladium fell 1.4% to $571.45.
Reuters
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