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Gold prices sank to their lowest in more than 10 months on Monday, hit by expectations of an increase in US interest rates this week that boosted US Treasury yields.
Spot gold fell 0.15 per cent to $1,155.66 per ounce after hitting its lowest since February 5 at $1,151.34 an ounce, clocking the third straight session of declines. US gold futures also reached a 10-month low, easing 0.4 per cent to $1,157.60 per ounce. The Federal Reserve is widely expected to hike interest rates for only the second time in a decade at a two-day meeting that begins on Tuesday. But bets are now being placed on the timing of rate hikes next year.
“The Fed's statement is much more important on this occasion than the rate hike because it’s been very widely expected that rates will increase at this meeting,” said ICBC Standard Bank analyst Tom Kendall.
“It's unlikely that the Fed would do anything different to what's expected so it is going to be about what the tone of that statement is about growth next year.”
