 "Gold hits 3-week low after Fed statement")
Gold hit three-week lows on Thursday after posting its biggest one-day fall since late January in the previous session, reacting to comments from Federal Reserve head Janet Yellen suggesting US interest rates could rise sooner than expected.
Gold prices dropped 1.8 per cent. Record low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, were a key factor driving the precious metal to all-time highs in recent years.
Spot gold extended losses on Thursday morning to $1,325 an ounce, its lowest since February 28. It was down 0.3 per cent at $1,327 an ounce at 10:17 GMT, while US gold futures for April delivery were down $13.6 an ounce at $1,328.
“Gold will see a rebound after touching $1,300 an oz due to ongoing geopolitical tensions,” he said.
“Gold was already on the defensive as safe haven bets were closed, and the Fed news added some additional pressure,” Saxo Bank’s head of commodities research Ole Hansen said. “The market is now busy pricing in higher rates sooner than previously expected, and that could become poisonous for gold.”
Demand for physical gold in China, the world’s biggest consumer of the metal, was lacklustre on Thursday, dealers said. In the physical market, premiums for gold bars in Hong Kong were unchanged from last week at $1 an ounce to the spot London prices, and at 80 cents to $1 in Singapore.
Gold prices dropped 1.8 per cent. Record low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, were a key factor driving the precious metal to all-time highs in recent years.
Spot gold extended losses on Thursday morning to $1,325 an ounce, its lowest since February 28. It was down 0.3 per cent at $1,327 an ounce at 10:17 GMT, while US gold futures for April delivery were down $13.6 an ounce at $1,328.
“Gold will see a rebound after touching $1,300 an oz due to ongoing geopolitical tensions,” he said.
“Gold was already on the defensive as safe haven bets were closed, and the Fed news added some additional pressure,” Saxo Bank’s head of commodities research Ole Hansen said. “The market is now busy pricing in higher rates sooner than previously expected, and that could become poisonous for gold.”
Demand for physical gold in China, the world’s biggest consumer of the metal, was lacklustre on Thursday, dealers said. In the physical market, premiums for gold bars in Hong Kong were unchanged from last week at $1 an ounce to the spot London prices, and at 80 cents to $1 in Singapore.