Gold Declines After Fund Holdings Take a Fall on Fed Outlook
Gold declined to a 4 four week low after investors withdrew their investment in bullion backed funds.
This new development is also due to the anticipation that the Federal Reserve might increase their rates in December.
The chances that the regulatory body will increase its rates have risen to 50% whereas it was 43% about a month ago as rated by the Fed Fund futures data. Higher rates will create a decline in gold’s investor sentiment as unlike many other bonds or equities bullion does not pay interest.
Federal Reserve officials have indicated that they are still expecting a tighter policy this year. This has come as a shock to investors who have been buying gold as they were banking on the fact that the turmoil in China’s economic data will delay an increase in interest rates.
Gold and Other precious Metals Decline
Immediate delivery Gold price has declined by 0.4% to $1,137.67 per ounce in London which has led to the metal hitting the rock bottom. Along with gold, silver dropped by $15.38/15.43 per ounce which is a 17 cent loss. Palladium went down by $16 to $660/665 and Platinum went down by $971/976 which amount to a $16 decline.