November 27, 2015
Gold Poised for 6th Straight Weekly Drop, Fed Rate Hike View Drags
(Reuters) - Gold dipped towards its lowest level in nearly six years on Friday and was on track for a sixth straight weekly decline, weakened by a robust dollar and expectations of a U.S. interest rate hike next month.
The dollar is trading near an eight-month high against a basket of major currencies, boosted by euro weakness and prospects of higher U.S. rates.
The Federal Reserve is widely expected to hike U.S. rates for the first time in nearly a decade when it meets next in December. Investors believe higher rates could dent demand for non-yielding bullion, while boosting the dollar.
"Once again, gold is unable to find a bid. Any small rally that we see is being sold into," said a Sydney-based precious metals trader.
Buying out of top consumer China has been good but has been unable to support prices, the trader said.
Spot gold had fallen 0.4 percent to $1,067.60 an ounce by 0322 GMT, edging close to $1,064.95 reached last week, the metal's lowest since February 2010.
The metal is down nearly 1 percent for the week. U.S. gold futures were also headed for a sixth consecutive weekly decline.
Buying in China has picked up in recent days due to the lower prices. Premiums on the Shanghai Gold Exchange, a proxy for demand in top consumer China, were trading at $5-$6 an ounce, versus $3-$4 at the beginning of the month.
However, other indicators of physical demand were not upbeat. India's gold buying in the key December quarter is likely to fall to the lowest level in eight years, hurt by poor investment demand and back-to-back droughts that have slashed earnings for the country's millions of farmers.
China's net gold imports from main conduit Hong Kong fell in October from a 10-month high reached in the previous month, data showed on Thursday.
Investor sentiment was weak with precious metals funds posting their biggest net outflow last week in around four months, according to Bank of America Merrill Lynch.
Among other precious metals, silver, platinum and palladium were all heading for weekly declines.