Gold Drops as USD Rises on Fed Member Comments

Gold traded at a one-month low Monday, adding to a nearly 3% slide last week that marked the precious metal’s toughest stretch so far in 2016. Gold remains pinned to a stronger dollar in the near term.

June gold  traded $2.50, or 0.2%, at $1,219.10 an ounce. The April contract, which has now been passed up by June as the most-active contract, finished Thursday trading at $1,221.60, its lowest finish since late February. The SPDR Gold Trust is little changed near $116.35 in premarket action.

On Thursday, gold futures logged their third straight weekly loss as of the preholiday close, dropping as markets move up their expectations for a Federal Reserve interest-rate increase, possibly as soon as April. That rate view supports the dollar at the expense of nonyielding metals.

“Gold prices are weaker in early U.S. trading, as a strengthening U.S. dollar index recently is bearish for the precious metals,” said Jim Wyckoff, analyst with Kitco.

The dollar is the main story. “A major terror attack in Pakistan Sunday isn’t having a significant impact on the marketplace,” Wyckoff added, referencing gold’s sometime-demand as a safe-haven cover amid geopolitical unrest.

via MarketWatch

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