Gold erases last week's gains as marketplace still obsessed with Fed rate hike
Gold edges lower in early U.S. trading Monday and has given
back most of last week’s price gains. Ideas that a strengthening U.S. economy will support a continued rise in
the value of the U.S. dollar against the other major world currencies are bearish for gold.
December Comex gold was last down 1.48% at $1,128.70 an ounce.
December Comex silver was last down 3.55% at $14.575 an ounce.
Most major world stock markets are seeing some selling pressure to start the trading week, but the pressure is not strong.
Market participants are still worried over the timing of the next
interest rate hike from the U.S. Federal Reserve. Last week, Fed
Chair Janet Yellen appeared to lay out a case for a U.S. Fed funds rate
rise yet this year.
Recent upbeat U.S. economic data, including last Friday’s stronger-than-expected GDP report, also fall into the camp of monetary policy hawks and U.S. dollar bulls.
Investors will now await further economic data from the U.S. which personal income and outlays, pending home sales, and the Texas manufacturing survey.
Elsewhere, disappointing
economic data coming from China, the world’s second-largest economy, in
part spurred the downside price action in equities markets. Industrial
profits in China were reported down 8.8% in August, from a year ago.
China’s Shanghai stock index was slightly higher on the day, however, closing up 0.27%.
The key outside markets on Monday find the U.S. dollar index near steady and Nymex crude oil prices weaker and was last trading below $45.00 a barrel.
In other overnight news, reports said the government of Switzerland is investigating seven major banks that may have manipulated the price of gold, silver and other precious metals. The focus is on the spreads between the bid and ask prices for the metals.
China’s gold imports from Hong Kong and Switzerland doubled in August compared to last year. Demand for gold coming from India was also strong, said the report that was issued by Barclays Monday.
