TH: Gold wilts as investors zero in on rising chance of March hike
SINGAPORE, March 1 â€” Gold extended its losing streak to a third day on a surge in investorsâ€™ expectations that US central bankers may hike interest rates as soon as this month, buoying the dollar and undercutting demand for the metal.
Bullion for immediate delivery tumbled as much as 0.5 per cent to US$1,242.54 (RM5529.30) an ounce and traded at US$1,244.28 at 11.32am in London, according to Bloomberg generic pricing.
That followed a 0.3 per cent loss yesterday and 0.4 per cent drop on Monday, paring the metalâ€™s gain this year to 8.5 per cent.
Gold has been thrown into reverse amid a rapid rethink by investors about whether the Federal Reserve could move this month.
Yesterday, New York Fed President William Dudley said the case for tightening had become a lot more compelling, while the San Francisco Fedâ€™s John Williams said he expects a rate rise will receive serious consideration at the March 14-15 meeting.
A policy speech to Congress by President Donald Trump that lacked specifics wasnâ€™t seen as moving the dollar, according to Oanda Corp.
The speech by Trump â€śwas rhetoric high and detail low and everything he mentioned is already built into the USD price,â€ť Jeffrey Halley, senior market analyst at Oanda in Singapore, said by email. Attention will now turn to a speech by Fed Chair Janet Yellen thatâ€™s due on Friday, according to Halley.
The Bloomberg Dollar Spot Index rose as much as 0.6 per cent, gaining for a fourth straight day. Odds of a March hike implied by pricing in federal funds futures contracts surged to 82 per cent, up from 50 per cent on Monday and 34 per cent a week ago.
In other precious metals:
Platinum rose 0.2 per cent to US$1,026.05 an ounce Palladium was up 1 per cent at US$778.45 an ounce Silver rose 0.2 per cent to US$18.353 an ounce. â€” Bloomberg