Gold Around $1170 as Oil Skid Damps Inflation

Gold futures fell to the lowest since 2010 after crude oil’s slump to a three-year low in the U.S. eroded demand for the precious metal as an inflation hedge.

Societe Generale SA’s Michael Haigh, who correctly predicted gold’s slump last year, said on Oct. 30 that the drop in crude underscores that inflation will be muted, damping prospects for the metal. Oil entered a bear market last month as global demand ebbed and supplies jumped.

Gold headed for a consecutive annual drop for the first time since 1998. The dollar has surged against a basket of currencies after Japan expanded monetary stimulus last week, and the Federal Reserve moved closer to its first interest-rate increase in eight years. On Oct. 31, the metal touched $1,160.50 an ounce, the lowest intraday price since July 2010.

Bloomberg

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