Gold prices fall further in Asia as strong dollar prospect weighs
Published Sep 28, 2014 06:20PM ET
Gold lower in Asia
Investing.com - Gold prices eased further in Asia on Monday as investors expect continued dollar strength on an expected Federal REserve rate hike sometime next year.
On the Comex, gold futures for December delivery traded at $1,217.80 a troy ounce, down 0.08%.
Last week, gold futures ended close to their lowest levels of the year as the U.S. dollar notched up its eleventh consecutive week of gains, hitting investor demand for the precious metal.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
The dollar was boosted after the Commerce Department reported that U.S. gross domestic product was revised up to 4.6% in the three months to June from a previous estimate of 4.2%. It was the fastest rate of expansion since the fourth quarter of 2011.
The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.
Expectations for higher interest rates going forward are considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Investors will be looking ahead to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the economic recovery, after August’s report fell short of expectations
Also on the Comex, silver for December delivery fell 0.45% to $17.545 an ounce. Comex copper for December delivery was flat at $3.038 a pound.
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Written By: Investing.com
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