Benchmarknews, New York-gold prices down on Thursday (21/9/2017), settled below US $1,300 for the first time in September afterthe Federal Reserve hinted that U.S. interest rates will rise in December.
Gold for December delivery GCZ7, + 0.01% down $21.60, or 1.6%, to settle at $1 U.S., 294.80 an ounce–the lowest settlement sinceAugust 24, according to FactSet. The largestpercentage decline also to single session since the beginning of July. Shares of the SPDRGold ETF GLD-0.76%, down 0.7%.
“The size of the drop of gold shows that North Korea does not have to do with the spike in late summer at the end of the summer,” said Adrian Ash, head of research at BullionVault, to MarketWatch.com. Gold is often sought after status amid the roar of geopolitics.
“The heat of the Money bet lower than the Fed again,” he said. “Now surprising that [Fed Chairman] team Janet Yellen has been repeating what they announce in June about easing[quantitative easing] from next month.”
“But the next big shocks will likely lead to the plus side when traders realized how bad the interest rates the Fed will be missed from inflation in the year 2018,” said Ash.
On Wednesday, after the price of gold surged, indicating the U.S. central bank are still planning to raise interest rates again at the end of the year, with three more increases potentially into 2018.
The Fed also announced it would gradually shrink the balance sheet with a robust rate ofeconomic growth that started in October. U.S. interest rates higher to make other assets— such as bonds, more attractive than gold, which do not produce flowers. Interest rateshigher also usually pushes the dollar gold price, making the dollar less attractive to investors using other currencies.
The decline occurred because of the Fed’s monetary policy update see investors fled assets that do not generate, “said analysts at Accendo Markets in a note. “A strong U.s. dollar strengthens further sentiment put into sentiment, increasing the relative price of the precious metal.”
The Dollar Index DXY ICE,-0.28% on Wednesday scored the biggest one-day percentage rise since January. The index retreated, however, on Thursday, down 0.3% at 92,225.
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By taking a longer view, Trey Reik, strategistat Sprott Asset Management, predicted a bullish fundamental factors to survive survive, as he questioned the strength of the global economy. Gold has traded at its highest point in a year to start September.
“As an investor in precious metals, we oftenface the pressures that global economic conditions, despite its rather excited, very much different from the negative impact of the financial crisis. The funniest thing out of sight that almost everywhere this is how precisely the wrong information that’s actually — almost every size of domestic and global debt significantly worse today than at the peak of the financial crisis, “he said, in a comment.
“We realize that erode the structural debt problem again is an exhausting workout for equity shares, but we believe the runaway gold recently would probably be a harbinger of increased financial pressure,” he said. “If we are correct in our analysis, the determination ofposition in a leading asset classes are likely to be calibrated with a real advantage gold.”
In other metals trading, December silver SIZ7, + 0.10% also fell 31.6 cents or 1.8% to US $17,018 per ounce. The iShares Silver TrustETF SLV,-0.99% down 0.9%.
December copper HGZ7,-0.09%, settled at US $2,935 per pound, down 1.2%. October platinum PLV7, + 0.00% finished at US $939.90 per ounce, down 0.6%, while December Palladium PAZ7, + 0.02% tacked on 0.2% to $911.55 per ounce …. (Red).