(MCX BABA.COM):-Gold held near a three-week low as the U.S. economy expanded more than estimated, boosting the case for higher interest rates. Holdings in the biggest exchange-traded fund backed by the metal fell at the fastest pace in 18 months.
Bullion for immediate delivery traded at $1,176.79 an ounce by 9:37 a.m in Singapore from $1,176.57 yesterday. Prices fell on Dec. 22 to $1,170.76, the lowest since Dec. 1. Futures on the Comex were at $1,176.80 an ounce from $1,178 yesterday.
Gold dropped 2.1 percent this year after tumbling 28 percent in 2013 as prospects for higher U.S. borrowing costs amid accelerating growth and a plunge in oil prices cut the metal’s lure as an inflation hedge. The economy expanded at a 5 percent annual rate in the third quarter, the biggest advance since 2003. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, held near a five-year high.
“The sentiment is still kind of cautious and that’s probably understandable considering we’re moving to a tightening cycle in the U.S,” said Mark Pervan, head of industry economics and research at Australia & New Zealand Banking Group Ltd. in Melbourne. Gold “gets the strongest headwind from a firmer U.S. dollar and strengthening U.S. interest rates.” The dollar index was 0.2 percent lower today after rising yesterday to the highest close since March 2009. Assets in the SPDR Gold Trust fell 1.6 percent to 712.9 metric tons, the biggest loss since June 2013, data compiled by Bloomberg show.
Silver for immediate delivery advanced 0.2 percent to $15.7922 an ounce. Palladium added 0.2 percent to $814.75 an ounce, while platinum fell 0.2 percent to $1,191.06 an ounce.