08 January 2015
Gold Extends Retreat From Three-Week High on U.S. Rates Outlook
(Bloomberg) - Gold declined for a second day as global equities to oil prices rebounded before a U.S. jobs report that will provide clues on the outlook for interest rates and holdings in the largest exchange-traded product shrank.
Bullion for immediate delivery fell as much as 0.5 percent to $1,204.97 an ounce, and traded at $1,207.20 at 12:47 p.m. in Singapore, according to Bloomberg generic pricing. The metal rose on Jan. 6 to $1,223.19, the highest since Dec. 16, as crude’s retreat to less than $50 a barrel sent stocks around the world tumbling.
The Bloomberg Dollar Spot Index headed for the highest close on record as minutes of the Federal Reserve’s Dec. 16-17 meeting showed policy makers agreed the U.S. economy was likely to continue improving. The data due tomorrow are expected to show U.S. employers added 200,000 or more jobs for an 11th month, backing the case for higher borrowing costs. Fed Chair Janet Yellen has said it’s unlikely the central bank will raise interest rates before late April.
“We see a bit of calm returning to the equity and oil markets, so gold takes a back seat again,” Wang Tao, a strategist at CITIC Futures Co., a unit of China’s biggest listed brokerage, wrote in an e-mail. “We continue to expect that the Fed will raise rates this year, which will drive the dollar higher and pressure gold.”
Gold for February delivery decreased 0.3 percent to $1,207.30 an ounce on the Comex in New York, after futures climbed on Jan. 6 to $1,223.30, the highest price since Dec. 16. Assets in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, fell for a second day yesterday to 704.83 metric tons, the lowest level since September 2008.
Silver for immediate delivery lost 0.4 percent to $16.471 an ounce. Prices advanced on Jan. 6 to $16.7091, the highest level since Dec. 15. Spot platinum traded at $1,217.50 an ounce from $1,218.50 yesterday, while palladium dropped 0.3 percent to $788.75 an ounce.