Gold fell more than 1 percent to a five-year low on Wednesday as a bounce in the dollar fueled downside momentum, with investors continuing to pull away from the metal after its dramatic slide earlier this week.
A looming rise in U.S. interest rates, the first in nearly a decade, has dented gold’s investment appeal, encouraging more sellers in the market after Monday’s 3 percent rout, its biggest one-day drop since September 2013.
Holdings in the world’s biggest gold-backed exchange-traded fund (ETF), SPDR Gold Shares, fell for a fourth day on Tuesday, declining another 4.8 tonnes to hit their lowest since 2008. Its reserves have nearly halved from their 2012 peak.
Spot gold was down 1.1 percent at $1,088.78 an ounce at 1213 GMT, while U.S. gold futures for August delivery were down $15.50 an ounce at $1,088.00. Earlier spot prices touched their lowest since March 2010 at $1,087.04 an ounce.
Its decline on Wednesday picked up momentum after the dollar moved into positive territory against a basket of currencies.
“Everything speaks against rising gold prices,” Commerzbank analyst Daniel Briesemann said. “ETF investors are getting rid of their holdings, and it seems speculators are also continuing to sell. It’s a perfect storm for gold.”
via Reuters 
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