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Gold in longest stretch of declines since May as Fed bets climb
[SINGAPORE] Gold dropped for a seventh straight day, heading for the longest run of declines since May, as comments from leading central bankers boosted speculation that US interest rates may rise as soon as next month, buoying the dollar.
Bullion for immediate delivery lost as much as 0.4 per cent to US$1,316.09 an ounce, the lowest since July 27, and traded at US$1,317.59 at 9:02 am in Singapore, according to Bloomberg generic pricing. The metal lost 1.5 per cent last week.
Gold's rally this year has been pegged back as a September rate hike is now in the cards after Federal Reserve Chair Janet Yellen said on Friday that the case for tightening had strengthened, while her deputy, Stanley Fischer, said an increase at the Sept 20-21 meeting was possible.
On Saturday, Bank of Japan Governor Haruhiko Kuroda reiterated a pledge to ease policy further if necessary, potentially hurting the yen.
Fed funds futures as of Friday indicated a 42 per cent chance that the Fed will hike as early as next month, up from 22 per cent a week earlier, and investors now turn their attention to US payrolls data later this week for further clues.
Higher rates tend to hurt bullion while boosting the US currency, which rose as much as 0.2 per cent on Monday.