Gold set for second straight yearly drop

GOLD held steady on Friday (Dec 30), but was headed for a second straight yearly loss as aggressive rate hikes by the US Federal Reserve dented the non-yielding bullion’s appeal.

Spot gold was little changed at US$1,815.20 per ounce as of 0042 GMT. US gold futures fell 0.2 per cent to US$1,821.90.

Bullion was headed for an annual decline of 0.7 per cent as the Fed’s hefty interest rate hikes boosted the dollar and made gold expensive for holders of foreign currencies. The dollar index eyed an yearly rise of more than 8 per cent.

However, gold prices have risen nearly US$200 from a more than two-year low hit in September on hopes that the US central bank might slow its pace of rate hikes.

The Fed raised interest rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each.

Higher rates increase the opportunity cost of holding gold as it pays no interest.

Meanwhile, data on Thursday showed that US weekly jobless claims ticked higher last week but remain in a range, indicating the job market remains tight.

China’s net gold imports via Hong Kong slipped to their lowest level in six months in November, official data showed on Thursday.

Spot silver rose 0.1 per cent to US$23.88, platinum slipped 0.6 per cent to US$1,048.57 and palladium lost 0.1 per cent to US$1,812.36.

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Gold prices edge up as dollar eases

Silver and platinum were both headed for an yearly rise, while palladium was headed for an annual decline of over 4 per cent. REUTERS