Gold price rebounds from 4-month low on global cues

Gold extended losses on Monday, dropping towards its lowest level in almost six years, and was poised to record its steepest monthly slide in 2-1/2 years on prospects of a USA interest rate hike this year. Non-farm US payrolls data for November this week will help to shape the Fed policy makers’ decision on rates next month. Spot gold is trading at $1,071.84 a troy ounce, up from the previous closing price of… “Fed officials reaffirmed the U.S. rate hike in December which has continued to strengthen the dollar-the major force driving gold lower”, Netra Deshpande, senior research analyst at Emkay Commotrade said.

The precious metals have been hit by strength in the dollar and expectations that the Fed would hike rates in December for the first time in nearly a decade.

Despite lacklustre demand from India and China over the past few weeks, the jewellry industry is expected to see sales ramp-up as low prices lead to increased buying.

But prices inched higher on Monday as some traders purchased previously sold gold futures contracts to lock in gains on the pullback. Gold was down more than 6.5% in November.

“The ECB rate announcement on Thursday 3 December could impact the Euro if the bank further loosens policy…”

Snapping its three-day losing run, gold price recovered from over a four-month low by surging Rs 175 to Rs 25,700 at the bullion market on Tuesday, taking positive cues from global markets amid fresh buying by jewellers. On Friday, the metal had dropped to $1,052.83, its lowest level since February 2010.

Overall, institutional money keeps walking away from gold, with holdings in the SPDR Gold Trust ETF shrinking another tonne Friday, but Beijing confirmed it added another 14 tonnes last month, putting Chinas bullion reserves now above 1,722 tonnes, according to Ash.

Silver was up 0.6 percent at $14.17 an ounce, while platinum traded up 0.9 percent at $838.31 an ounce and palladium was 0.3 percent higher at $546.47 an ounce.

Globally, gold climbed 0.9 per cent to $1,074.76 an ounce in Singapore.

The West African CFA Franc – used in both Mali and Cote D’Ivoire, where Randgold owns 4 of its 5 mines – has dropped 15% in value against the US Dollar over the last 12 months.