April 9, 2015
Gold slips on renewed bets for U.S. rate hike in June
(Reuters) - Gold extended losses on Wednesday, falling below $1,200 an ounce after U.S. Federal Reserve minutes revealed an interest rate hike could take place as early as June, causing the dollar to turn higher.
The March meeting concluded with the Fed opening the door to a June rate hike, and the minutes said that "several participants" went on record saying they expected upcoming economic data would warrant an initial rate increase that month.
Expectations had been growing that the Federal Reserve could delay an anticipated U.S. rate rise to next year.
Spot gold was down 0.8 percent at $1,199.30 an ounce at 2:34 p.m. EDT (1834 GMT). U.S. gold for June delivery settled down $7.50 an ounce, or 0.6 percent, at $1,203.10. The market closed prior to the release of the Fed minutes.
"Perhaps the committee is slightly more hawkish than expected," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"The outlook for precious is now clouded as gold and silver have given up all of payrolls-related gains."
Spot gold climbed to its highest level since Feb. 17 at $1,224.10 on Monday, after weaker-than-expected U.S. nonfarm payrolls cooled prospects of an earlier interest rate move.
The dollar turned higher following the Fed minutes, rising 0.2 percent against a basket of leading currencies. A firm greenback often weighs on gold prices.
Major U.S. stock indexes traded in positive territory in volatile dealings following the Fed minutes.
On Tuesday, Minneapolis Fed President Narayana Kocherlakota laid out a case for waiting until the second half of 2016 to start raising rates, a day after New York Fed President William Dudley said the timing of an increase was unclear.
Physical demand from second-biggest gold consumer China stayed weak as the premium for physical gold at the Shanghai Gold Exchange held just above par with the global spot benchmark on Wednesday.
"There are more investment venues for the Chinese to look into other than gold. Equities are roaring ahead and they can now buy bond futures. I don't see why people should buy gold at this time," said Howie Lee, investment analyst at Phillip Futures.
Spot silver was down 2.3 percent at $16.42 an ounce, while platinum slipped 1 percent to $1,159.50 an ounce and palladium lost 1.8 percent at $753 an ounce.