Gold traded near a three-month low as the dollar advanced on speculation the Federal Reserve will increase interest rates next year, curbing demand for an alternative investment.
Bullion for immediate delivery was at $1,257.75 an ounce at 9:27 a.m. in Singapore from $1,255.45 yesterday, according to Bloomberg generic pricing. Prices dropped to as low as $1,251.52 yesterday, the lowest since June 10. Gold for December delivery added 0.4 percent to $1,258.70 on the Comex.
Gold has declined 5.2 percent this quarter as the outlook for higher borrowing costs reduced demand for an inflation hedge. Fed policy makers will meet Sept. 16-17. The Bloomberg Dollar Spot Index, which tracks the greenback against a basket of 10 peers, climbed to the highest since July 2013 today. The Standard & Poor’s 500 Index rose to a record close on Sept. 5.