Gold Steady After Touching Eight Month Low

Gold traded little changed after falling to an eight-month low in New York as investors weighed an improving U.S. economy against speculation lower prices may attract purchases. Silver dropped to a four-year low.

Gold is headed for its first quarterly loss this year as the Bloomberg Dollar Spot Index rose to a four-year high and investors cut gold-backed fund holdings. The Federal Reserve raised interest-rate projections for 2015 last week, even as it maintained a pledge to keep rates low for a considerable time, and stayed on course to end monthly bond buying in October.

Bullion’s 14-day relative strength index held below 30 for a 10th day, signaling to some investors who study charts that prices may be poised to rebound. Trading volumes in China, which replaced India as the largest buyer in 2013, increased last week. Indian demand typically picks up from about September before the country’s festival period and wedding season.

“Investor sentiment has shifted from lack of conviction to bearish as the macro environment has turned increasingly negative for gold,” analysts at Barclays Plc wrote in a report today. “Expectations of rising rates and a stronger dollar continue to pressure gold. However, gold is still likely to draw some support from the physical market during the seasonally strong period for consumption.”

Gold for December delivery lost 0.1 percent to $1,215.50 an ounce by 7:16 a.m. on the Comex in New York. Prices reached $1,208.80, the lowest since Jan. 2, and ended 2013 at $1,202.30. Gold for immediate delivery fell 0.1 percent to $1,214.61 in London, according to Bloomberg generic pricing.

via Bloomberg

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.