03 February 2015
Gold Holds Drop as U.S. Borrowing Costs Assessed Amid Slowdown
(Bloomberg) - Gold held losses as investors weighed prospects for higher U.S. interest rates amid signs that a global slowdown may be hurting the world’s largest economy.
Bullion for immediate delivery traded at $1,274.90 an ounce by 11:30 a.m. in Singapore from $1,274.41 yesterday, when prices dropped 0.7 percent, according to Bloomberg generic pricing. The metal pared a decline of 1.4 percent yesterday after a report showed U.S. factory output slowed, while a measure of price swings over 100 days rose to 18.5, the highest since February 2014, data compiled by Bloomberg show.
Gold has risen 7.6 percent this year, rallying from two years of losses, as slowing growth spurred central banks in Europe and Asia to boost stimulus. That’s also increased speculation that the Fed may hold back from raising its key rate, which has been kept near zero since 2008. Yesterday’s report showed U.S. manufacturing expanded last month at the weakest pace in a year, while data this week may show employers continued to add workers in January.
“Volatility in gold has risen as worse-than-expected U.S. economic data has once again raised the question of the pace of interest-rate increases,” Mark To, head of research at Wing Fung Financial Group, a trader and refiner in Hong Kong, wrote in a note. “We still believe that gold is in a downtrend. Investors will be closely watching the jobs data.”
Gold for April delivery slid 0.1 percent to $1,275.40 an ounce on the Comex in New York. The Bloomberg Dollar Spot Index was little changed after halting a three-day advance yesterday as Greece retreated from its call on the euro area to write down its debt, spurring gains in the common currency.
Silver for immediate delivery traded little changed at $17.2303 an ounce. Spot platinum added 0.3 percent to $1,230.75 an ounce and palladium rose 0.3 percent to $788.57 an ounce.