Gold futures declined on signals that U.S. inflation concerns eased, while the dollar extended a rally to the highest in more than five years, eroding demand for the precious metal as a store of value.
Richard Fisher, the president of the Federal Reserve Bank of Dallas, said he is not concerned about U.S. inflation, according to an interview in the Financial Times. The greenback climbed to the highest since March 2009 against a basket of 10 currencies as Japan and Europe added to monetary stimulus.
Global holdings in exchange-traded products backed by gold last week slumped to the lowest since May 2009. They have dropped 13 percent in the past 12 months. Inflation has remained below the Fed’s 2 percent target, and the central bank halted debt purchases following gains in the labor market.