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Gold drops as traders raise bets on December Fed rate increase
[SINGAPORE] Gold declined as investors factored in the increasing probability of the Federal Reserve raising US interest rates this year, boosting the US dollar and hurting bullion's appeal after two days of gains.
The metal for immediate delivery lost as much as 0.3 per cent to US$1,255.70 an ounce, and was at US$1,257.66 at 9:38am in Singapore, according to Bloomberg generic pricing. The drop pared this year's advance to 19 per cent.
Gold's rally in the first half has run out of steam as tighter US monetary policy is expected by the end of 2016 after the Fed started hiking last December. Futures prices signal the odds of a hike this December climbed to 68 per cent as of Monday from 61 per cent a week earlier.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose 0.1 per cent, heading for the highest close since July 28.