Gold futures fell in New York, moving closer to erasing this year’s gains as the outlook for an improving U.S. economy and higher interest rates curbs demand for the metal as an alternative investment.
The accelerating economy means investors are shunning gold even after the U.S. expanded sanctions against Russia and ramped up its military campaign to combat Islamic State in Iraq. Yesterday, the dollar climbed to the highest since June 2010 against a basket of 10 major currencies, combining with prospects for higher rates to erode the appeal of the metal as a hedge against inflation.
Gold dropped as much as 0.5 percent today. ECB President Mario Draghi didn’t disclose the size of a monetary stimulus plan after announcing that the central bank would buy covered bonds and asset-backed securities for at least two years.
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.