Gold at $1255 on Fed Speculation

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.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.